Quorum Health signed a definitive agreement to sell 70-bed Sunbury Community Hospital and 47-bed Lock Haven Hospital to Williamsport, Penn.-based UPMC Susquehanna, Becker's Hospital Review reported.
The deal is expected to close by Sept. 30.
- The move is the latest purchase by UPMC, which added the Susquehanna system to its own last October. The Pittsburgh-based health system is already expanding in central Pennsylvania and has 41% of the inpatient medical-surgical market in Western Pennsylvania, including 58% in Allegheny County, the Pittsburgh Post-Gazette reported in April.
The purchase of the two small hospitals is an example of what’s happening all over healthcare. A health system on the rise seeks to expand its footprint and purchases hospitals from a system looking to divest properties to improve its financial situation.
Quorum Health, which spun off from CHS, owns 35 hospitals in rural and mid-sized markets in 15 states. The system reported a $90.7 million loss in the fourth quarter of 2016. Adjusted earnings for 2016 was $162.9 million, compared to $263.7 million the previous year.
In announcing the loss, company officials said they are restructuring their hospital portfolio, plan to divest six hospitals and expect to bring about $200 million into the system through transactions, which will allow Quorum to reduce secured debt.
Quorum Health also recently agreed to sell Alabama-based 60-bed Cherokee Medical Center to NNZ Holdings.
UPMC’s outlook is much more positive with operating revenues growing to $11 billion with a net income of $871 million in the first nine months of the fiscal year. UPMC’s facility admissions and observations grew by 9%. UPMC Insurance Services Division also grew by 7% to 3.2 million members.
In addition to the Quorum Health purchases, UPMC is looking to further expand in central Pennsylvania by affiliating with Harrisburg-based PinnacleHealth System with the possibility of acquiring the three-hospital system in the future.