Health Management Associates last week agreed to build two new hospitals valued at more than $60 million in rural Southern towns where they will be the sole community providers.
The deals are a continuation of the investor-owned chain's strategy to operate hospitals in nonurban markets with little or no competition.
"Both are very good markets for us," said William Schoen, president and chief executive officer of the Naples, Fla.-based chain, which has 22 hospitals in 10 states.
In both cases, HMA will buy or lease the town's not-for-profit hospitals, converting them to tax-paying status. Then, if it receives state certificate-of-need approval, HMA will build new hospitals.
In Statesboro, Ga., HMA agreed to buy 158-bed Bulloch Memorial Hospital. HMA will lease the hospital, which is now owned by the Bulloch County Hospital Authority, and repay its $14 million in debt. In addition, HMA has agreed to build a replacement facility, estimated to cost $35 million to $45 million. If a CON is not approved, HMA will buy the present facility for $25 million.
In Hartsville, S.C., HMA will lease 116-bed Byerly Hospital, a private not-for-profit facility, and apply for a CON to build a replacement facility valued at $25 million to $30 million.
HMA also would repay Byerly's $5 million in debt. Proceeds from the deal will fund a new not-for-profit foundation.
In addition to HMA's, Byerly had received three other offers from Quorum Health Group and Columbia/HCA Healthcare Corp., two investor-owned chains based in Nashville, Tenn., and McLeod Regional Medical Center, a 381-bed not-for-profit tertiary-care hospital in Florence, S.C. Byerly will continue to have a referral relationship with McLeod, which is about 25 miles away.