Province Healthcare Co. wants to part with its hospital management arm, Modern Healthcare has learned, possibly by selling it to employees.
Two Nashville sources who spoke on condition of anonymity said news of the spinoff began to leak after employees of the unit, known as Brim Healthcare, learned of the plan. Another industry source based in Nashville said he had not heard of the plan to sell Brim to employees but said that he knew firsthand that Province wants to unload the management arm.
Province spokeswoman Merilyn Herbert said the Brentwood, Tenn.-based company does not comment on any rumored deals. Province would issue a news release if it had anything financially material to report, Herbert said, "so clearly nothing has occurred."
A sale of Brim, however, may not have a big enough effect on Province to be considered material. The unit manages 36 hospitals in 14 states and consistently accounts for about 2.1% of the company's revenue, according to Province's securities filings. The U.S. Securities and Exchange Commission notes on its Web site that "material information" isn't directly defined in federal securities law and is open to interpretation by courts depending on the facts and circumstances of a particular case.
Companies that own acute-care hospitals have shied away from the management business before. The former Hospital Corp. of America spun off its management subsidiary into the former Quorum Health Group. That company grew to own 22 hospitals, but when Triad Hospitals bought Quorum in 2001, Triad publicly shopped the management subsidiary, then known as Quorum Health Resources. Triad ended up holding on to the subsidiary, now known as QHR, because Triad was disappointed in the offers it received (Oct. 8, 2001, p. 17).
"QHR hasn't been for sale (since October 2001) and we have no plans to sell it," Triad spokeswoman Pat Ball said.
Cambio Health Solutions, a small unit of QHR that provides hospital turnaround services, was spun off to its employees in late 2003.