Kindred, Dignity partner to build Arizona rehab hospital, and other news

Kindred Healthcare and Dignity Health have agreed to build a 50-bed rehabilitation hospital in Chandler, Ariz. through a joint venture.

Kindred, a Louisville, Ky.-based post-acute-care provider, recently signed a definitive agreement to build and operate the facility with Dignity, a San Francisco-based health system that operates 35 hospitals. Kindred will own a slight majority in the venture and manage day-to-day operations.

This will be the duo's second joint venture. They also jointly operate a home health business in Southern California. The new hospital will be named Dignity Health Rehabilitation Hospital-East Valley, and is expected to open in the third quarter of 2016, pending regulatory and other approvals.

Kindred will add the facility to its two transitional-care hospitals, and home health, hospice and nonmedical home-care services in Phoenix. The provider expects to open a 120-bed transitional-care center in Phoenix in the second half of 2015, which will be licensed as a skilled-nursing facility. —Adam Rubenfire

Daughters of Charity Health System, the Los Altos Hills, Calif.-based group still searching for a buyer after its sale to Prime Healthcare Services unraveled this year, continues to face a tenuous financial picture.

The six-hospital Northern California system warned bondholders in November that it may not be able to continue operating without running out of funds. Its latest third-quarter balance sheet, for the period ended March 31, showed that Daughters has 20 days of cash on hand, a decrease from the 32 days it had at the same point last year.

Its largest challenges—which contributed to a $55.3 million operating loss in the quarter—include an adverse payer mix, reimbursement rate increases that were below historical levels and losses in its physician network, the system said in its financial filing.

Daughters watched its $843 million sale to Prime fall apart in March after the Ontario, Calif.-based chain refused to accept the lengthy list of conditions imposed on the deal by California Attorney General Kamala Harris.—Beth Kutscher