- Hospital operator Tenet Healthcare inked a deal to sell its two Tennessee hospitals to Methodist Le Bonheur Healthcare, a nonprofit health system based in Memphis, for $350 million in cash, according to a Dec. 13 filing with the Securities and Exchange Commission.
- As part of the deal, Methodist will pick up the physician practices associated with both hospitals, six MedPost urgent care centers and all but one surgery center, Tenet said in a statement on Friday.
- Methodist will work with Conifer, a Tenet subsidiary, for revenue cycle management services for both hospitals.
Tenet is largely exiting Memphis, Tennessee. Once the deal with Methodist is complete, Tenet will have only one surgery center left in Memphis, health system officials confirmed to Healthcare Dive.
"We continue to exit service lines, businesses and markets that we believe are no longer a core part of our long-term growth strategy," Tenet said in a Feb. 25 SEC filing.
Last year, Tenet trimmed its hospital portfolio by shedding eight hospitals across the country and all of its operations in the UK, according to the February filing.
In step with larger industry trends, Tenet has focused on expanding its outpatient services by adding surgery centers and increasing its ambulatory footprint.
Tenet's previous pickup of United Surgical Partners International (USPI) is an important piece of its long-term strategy as the company bets on the continued shift of surgical cases to outpatient settings.
Still, for all the focus on outpatient, Tenet did report three consecutive quarters of inpatient volume growth, which executives attributed to its overall strategy. Tenet has said it looks to invest in higher-acuity inpatient service lines.
Tenet CEO Ron Rittenmeyer hinted during its latest earnings call with investors that there's more to come regarding Tenet's next strategic moves. He said it's a topic that will be discussed at the J.P. Morgan Healthcare Conference, noting the company had just finished a two-day strategy session with its board of directors.
The deal will be subject to regulatory approvals, according to Friday's announcement.
Methodist, the buyer of the two Memphis-area hospitals, has been the subject of a series of investigative reports that show how the nonprofit pursued patients in court to collect unpaid bills, even garnishing the wages of its own low-wage workers. After the reports, Methodist agreed to extinguish the debt owed by thousands of patients.
Correction: In a previous version of this article, Tenet's exit was mischaracterized. Tenet is largely exiting Memphis.