Massive healthcare sell-offs are impacting ASCs in various markets, including changes in competitive dynamics, reimbursement rates and opportunities for partnerships.
Here are three major health systems offloading hospitals:
Tenet Healthcare
Dallas-based Tenet Healthcare, parent company of United Surgical Partners International, has divested 14 hospitals this year, earning more than $4.8 billion.
“These transactions have strengthened our hospital portfolio by enhancing returns and positioning us in more attractive markets,” Tenet CEO Saum Sutaria, MD, stated during an earnings call.
In the first quarter, the for-profit healthcare system sold nine hospitals in California and South Carolina. On September 30, it finalized the sale of its 70% stake in Brookwood Baptist Health, based in Birmingham, Alabama, to Orlando Health. The following day, Tenet completed the sale of its ownership in five Alabama hospitals for approximately $910 million in cash, yielding around $790 million after taxes.
Earlier in the year, Tenet sold four Southern California hospitals to UCI Health for $975 million in March. Additionally, three South Carolina hospitals were sold to Novant Health, based in Winston-Salem, North Carolina, in a $2.4 billion deal that took effect on February 1.
According to Dr. Sutaria, these sales have considerably improved Tenet’s leverage ratio, and the company remains committed to maintaining a stronger balance sheet.
Ascension
St. Louis-based Ascension saw a $3 billion operating loss in fiscal 2023 and has since taken action to sell a number of facilities across the country to recover.
Effective Nov. 1, Ascension sold its St. Vincent's Health System to The University of Alabama at Birmingham Health System Authority in a deal valued at $450 million.
On June 25, Birmingham, Ala.-based UAB Health agreed to acquire the five-hospital Ascension St. Vincent's Health System.The $450 million deal still needs approval from federal regulators and is expected to close this fall.
In March, Ascension Michigan, which includes 16 hospitals, announced plans to sell three campuses and an ASC to Midland-based MyMichigan Health this summer.
In February St. Louis-based Mercy announced plans to acquire Ascension Via Christi Hospital in Pittsburg, Kan. The proposed transaction includes the hospital, its locations and related physician practices. Also in February, Ascension sold Our Lady of Lourdes Memorial Hospital System in Binghamton, N.Y., to Sayre, Pa.-based the Guthrie Clinic, now a six-hospital system.
Community Health Systems
Since 2020, Franklin, Tenn.-based Community Health Systems (CHS) has divested 29 hospitals, most recently selling Tennova Healthcare-Cleveland (Tenn.) to Vitruvian Health in Dalton, Ga., on Aug. 1. The 351-bed facility was sold for $160 million, with the potential for an additional cash payment depending on changes to certain supplemental reimbursement programs.
CHS has also reached a definitive agreement to sell its three hospitals in Pennsylvania to nonprofit WoodBridge Healthcare for $120 million. This transaction, which would mark CHS’s exit from Pennsylvania, is expected to close in the fourth quarter, pending regulatory and closing approvals.
In October, CHS completed the sale of Davis Regional Psychiatric Hospital and Davis Regional Medical Center in Statesville, N.C., to Iredell Health System.
The for-profit health system anticipates raising $1 billion from ongoing hospital sales to further reduce its debt.