CHS to sell rural Tenn. hospital to Rennova Health
Community Health Systems will sell its 85-bed hospital in Jamestown, Tenn., to Rennova Health as part of a broader effort to bring down its debt load through hospital divestitures, the company said Wednesday.
Franklin, Tenn.-based CHS said the transaction is among the additional planned divestitures the system has announced previously. CHS reported outstanding debt of $13.9 billion in the third quarter of 2017. The system's net loss from continuing operations grew to $108 million that quarter from $77 million at the same period in 2016.
For-profit CHS expects the divestiture of Tennova Healthcare – Jamestown and its associated assets will close in the second quarter pending regulatory approvals and closing conditions. West Palm Beach, Fla.-based Rennova opened its first rural hospital in Tennessee in August 2017, and CEO Seamus Lagan wrote in a statement that the planned acquisition represents its commitment to expanding its rural hospital model.
"This hospital is approximately 38 miles (less than a one-hour drive) from our current hospital in Oneida and will benefit by receiving patients from Oneida that require operations and treatment not provided there," he said. "The synergy of management and services in a close geographic location creates numerous efficiencies for Rennova and will allow us to support a greater number of healthcare providers and residents in the local area."
CHS CEO Wayne Smith told investors at the J.P. Morgan Healthcare Conference in San Francisco earlier this month the company was looking to add $2 billion in revenue in the first half of 2018 through the sale of struggling hospitals. That's on top of the $2 billion in revenue CHS said it netted through the sale of 30 hospitals in 2017. The company currently owns 125 hospitals, and Smith said he wanted to have "theoretically around 100 hospitals that are in significantly improved markets."
In its third quarter earnings report, CHS announced the completion of sales on its 126-bed Highlands Regional Medical Center in Sebring, Fla. and a 181-bed Merit Health Northwest Mississippi in Clarksdale to Curae Health.
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