A physician-led group that sought to buy Lutheran Health Network, an eight-hospital Indiana hospital system in Indiana, from Community Health Systems (CHS) has decided to not go through with the plan, Inside Indiana Business reported. Fort Wayne Physicians LLC and CHS released a joint statement that said they will continue to work together and that CHS agreed to a “substantial capital commitment” and wage increases at Lutheran Health Network.
In other CHS news, the hospital chain completed the divestiture of nine hospitals, Becker's Hospital Review reported. The large for-profit health system completed the sale of four central Pennsylvania hospitals to PinnacleHeatlh System: the 100-bed Memorial Hospital in York, 214-bed Lancaster Regional Medical Center, 148-bed Heart of Lancaster Regional Memorial Center in Lititz and 165-bed Carlisle Regional Medical Center in Carlisle.
CHS also divested the two-hospital Rockwood Health System in Spokane, Washington, to MultiCare Health System; the 88-bed Lake Area Medical Center in Lake Charles, Louisiana, to Christus Health; and two Texas hospitals — 350-bed Tomball Regional Medical Center and 67-bed South Texas Regional Medical Center — to HCA Healthcare.
The hospital sales are part of CHS’ plan to pay off its debt, which was at nearly $15 billion at the end of 2016. The company announced in February it is looking to divest more than two-dozen hospitals this year after a rough 2016, in which the company lost $1.7 billion.
Though CHS is looking to reduce hospitals, the company didn't plan to sell Lutheran Health Network. In fact, Lutheran Health Network recently announced a $500 million plan to invest in the system, including Lutheran Hospital renovations, expand the emergency department and build new outpatient centers among other changes.
The sale of Rockwood Health System in Washington made news recently when nonprofit Empire Health Foundation filed a lawsuit claiming that CHS did not provide enough indigent care at the Spokane hospitals. The lawsuit alleges that CHS agreed to “provide charity care and essential health benefits as required under Washington’s Charity Care Act” when it purchased the hospitals in 2008. However, the suit alleges CHS did not provide the required $110 million in uncompensated and discounted care between September 2008 and December 2015.
Empire Health Foundation was formed with the proceeds of CHS’ purchase of Deaconess Medical Center and Valley Hospital and Medical Center in 2008. The foundation reviewed the charity care data as part of a review after CHS announced it planned to sell the two hospitals to MultiCare Health System for $425 million.
The hospital operator has been steadily chipping away at divestitures and its debt load. The sale of these nine hospitals combined with recent sales of nine other hospitals means that CHS is now well more than halfway to its goal of selling 25 hospitals this year. CEO Wayne Smith in May said during an earnings call that selling hospitals will be less of a focus in the future. "There may be one or two more (divestitures), but we're not specifically thinking about doing anything significant for the rest of the year," he said.