Community Health Systems announced Wednesday it has signed definitive agreements to sell two Florida hospitals to AdventHealth, a faith-based, not-for-profit health system.
The deals include Heart of Florida Regional Medical Center, a 193-bed hospital in Davenport, Fla., and Lake Wales Medical Center, a 160-bed hospital in Lake Wales, Fla., along with their associated physician clinics and outpatient services. Both transactions require regulatory approval and are expected to close late in the third quarter of 2019.
"We are excited about the opportunity to offer our unique promise of whole-person care to these communities and look forward to extending our mission to the team members, physicians, patients and residents of Polk County and the surrounding area," Terry Shaw, CEO of Altamonte Springs, Fla.-based AdventHealth, said in a statement.
Modern Healthcare Metrics data show Heart of Florida appears to be on solid financial footing, whereas Lake Wales operated at a loss in 2017, the latest year for which data is available. The former drew $7 million in net income on $139 million in operating revenue last year, yielding a profit margin of 5%. That margin that has declined significantly over the past five years. In 2014, the hospital's operating margin was 17%, Metrics data show.
Lake Wales' operating margin has also fallen in recent years, from 1.4% in 2013 to an operating loss margin of 10% in 2017.
Ann Barnhart, CEO of Heart of Florida Regional Medical Center, said in a statement the hospitals are important to the communities they serve and her team looks forward to working with AdventHealth.
"We believe this will allow for a seamless experience of quality healthcare delivery to these communities," she said.
Lake Wales Medical Center's CEO, Rebecca Brewer, said in a statement the hospital has been taking care of patients for many years, "and this will continue in the future."
CHS, a for-profit chain based in Franklin, Tenn., said the hospitals are among the planned divestitures discussed on its first quarter earnings call. CHS also said it divested seven hospitals in the first quarter, which ended March 31. The sales are part of an ongoing effort to bring down CHS' debt load, which dropped by $7 million year-over-year, rounding out the first quarter at about $13.4 billion.