Community Health Systems is negotiating deals to divest some assets and does not anticipate running into the same issues that last month killed its plan to sell two hospitals to Novant Health.
During a second-quarter earnings call with financial analysts Thursday, executives at the Franklin, Tennessee-based provider said the buyer pool is shifting and those changes should benefit its efforts.
Related article: Novant Health axes $320M deal for two CHS hospitals
"Many of both the for-profit and the non-for-profit healthcare systems are looking outside of their traditional area of service to expand," said Kevin Hammons, president and chief financial officer. "The FTC has been, you know, somewhat of an issue for transactions now for a few years. So as I look at the remaining opportunities and current deals that we're negotiating right now, the buyers are all out of market, typically out of state."
Novant ended its plans to acquire two CHS hospitals in North Carolina last month after the U.S. Court of Appeals sided with the Federal Trade Commission, which had attempted to block the transaction. The agency filed a lawsuit in January seeking to block the proposed $320 million transaction, arguing it would decrease care quality and increase costs.
For-profit CHS said the sale of its Tennova Healthcare hospital in Cleveland, Tennessee, is on track to close in the third quarter and a transaction would generate proceeds of about $160 million. Executives said one or more other transactions could close this year, part of an asset sale plan to generate combined proceeds of more than $1 billion.
CHS said it would use some of those proceeds for physician recruitment and capacity expansions.
"We've [had] really successful physician recruitment over the last couple of years and we're still ramping up providers very successfully," CEO Tim Hingtgen said. "[This] led to the strong clinic visits in the first and second quarters of this year, which we believe bodes well for procedural volumes in the latter half of the year."
The health system reported a second-quarter net loss of $13 million, or 10 cents per share, compared with a net loss of $38 million, or 29 cents per share in the comparable year-ago period. Operating revenues increased 0.8% to $3.14 billion.
