Franklin, Tennessee-based hospital giant Community Health Systems (CHS) has continued with its previously announced plan to divest part of its portfolio, announcing that a subsidiary has agreed to sell a two-hospital health system in South Carolina by the end of the year.
CHS's subsidiary signed a definitive agreement to sell Mary Black Health System, as well as its physician clinic operations and outpatient services, to Spartanburg Regional Healthcare System in Spartanburg, South Carolina. That includes the 207-bed Mary Black Health System-Spartanburg and the 125-bed Mary Black Health System-Gaffney.
The deal is expected to close in the fourth quarter. When complete, CHS will continue to operate four hospitals in South Carolina.
CHS is one of the largest publicly traded hospital companies in the U.S. and operates 117 affiliated hospitals in 20 states with an aggregate of about 19,000 licensed beds. CHS has posted significant losses over the past several years, including a whopping $2 billion loss in the fourth quarter of 2017.
For the last couple of years, the financially challenged health system has been pursuing a financial recovery strategy of selling hospitals across its portfolio which it says are low-performing and low-margin (a point Axios has challenged).
During its most recent earnings report, the health system reported that it had reduced its losses to $110 million in the second quarter from a net loss of $137 million in the second quarter of 2017. At the time, CHS said it completed seven hospital divestitures with agreements to sell five additional hospitals which had a combined total of approximately $2 billion in annual net operating revenues and combined mid-single digit adjusted EBITDA margins during 2017. It sold off 30 facilities last year.
Last week, the health system announced it sold the 238-bed AllianceHealth Deaconess hospital in Oklahoma City to a subsidiary of Integris Health. In August, the health system completed the sale of 425-bed Munroe Regional Medical Center in Ocala, Florida, to Florida Hospital Ocala Inc., a subsidiary of Adventist Health System Sunbelt Healthcare Corporation.
CHS has not yet announced when it will release its third-quarter earnings, but it's expected in the first week of November.