Sales such as this provide the organization with the opportunity to reduce debt and invest in its earnings growth.
Community Health Systems, a Tennessee-based healthcare provider with over $3 billion in net operating revenues, has announced plans to sell two of its North Carolina hospitals to subsidiaries of Novant Health for about $320 million.
The sales include 123-bed Lake Norman Regional Medical Center, an acute care hospital in Mooresville, NC, and Davis Regional Medical Center in Statesville, NC, which is in the process of transitioning from a general acute care hospital to an inpatient behavioral health hospital.
Community Health Systems did not provide much more detail on the sale of the two hospitals in its press release. The transactions are expected to close later this year. However, during the company’s latest earnings call it noted that it received $85 million of cash proceeds for the sale of one facility in West Virginia, which closed on January 1, 2023. This, along with other transactions mentioned in the call, is meant to provide Community Health Systems with opportunities to pay down debt and reinvest in certain resources aimed at advancing its long-term earnings growth.
In February, Community Health Systems posted a decline in its net operating revenues for the 2022 fourth quarter and the full year. Net operating revenues totaled $3.14 billion for the quarter, a decline from the $3.23 billion posted in the same quarter the year before. Net operating revenues for the year ended December 31, 2022, totaled $12.2 billion, a 1.3% decrease compared to $12.36 billion for the same period in 2021. The financial dip was due to labor costs, and lower operating revenue which could be linked to payer changes and lower inpatient volumes, the organization said in the earnings release.
Amanda Schiavo is the Finance Editor for HealthLeaders.