LifePoint Health, RCCH HealthCare Partners announce merger plans

Handshake business deal executives
LifePoint was acquired by Apollo Global Management for $5.6 billion and will be merged with Apollo's RCCH HealthCare Partners. (Pixabay)

Tennessee-based LifePoint Health and RCCH HealthCare Partners signed an agreement to merge, forming a joint entity with a combined $8 billion in revenue.

Apollo Global Management, an investment firm that which owns RCCH, will acquire LifePoint for $5.6 billion. The acquisition value includes about $2.9 billion in debt and minority interest, according to an announcement.

If the merger is finalized, the joint health system will operate as LifePoint and include 84 non-urban hospitals across 30 states and regional physician practices, outpatient centers and post-acute care providers. The unified system would also include 7,000 physicians, 16,000 employees and 24,000 licensed beds.

Featured Webinar

Patient experience and the bottom-line impact on a practice

Practices that deliver exceptional experience often demonstrate strong financial performance and efficient operations. Join us to learn how to identify the most impactful connections between patient experience and financial performance, how to measure, track and improve patient experience as it relates to the bottom line, and identify patient experience measures that affect financial performance.

William F. Carpenter, current CEO of LifePoint, would oversee the joint health system. 

"LifePoint and RCCH are aligned in our missions and commitment to ensuring that non-urban communities across the country have access to quality care," Carpenter said in the announcement. "Together, we can extend this shared focus while generating new opportunities for growth and partnerships that will help us navigate the changing healthcare dynamics." 

RELATED: Nashville hospitals take aim at opioid crisis by adjusting approach to pain management 

LifePoint reported a net loss of $5.3 million in the first quarter of 2018, amid a 2.2% downtick in admissions and a loss of $3.2 million year over year in Medicare and Medicaid electronic health record incentive payments. 

The system announced that it would divest three hospitals in Louisiana during the first quarter, and it expects to make $20 million on those deals. 

The deal with RCCH and Apollo was unanimously approved by LifePoint's board of directors, and the system could solicit alternative acquisition proposals between now and August 22. The deal, should it clear that window and regulatory approvals, should close in the "next several months," the systems said in the announcement. 

RELATED: Policy experts blame provider consolidation, lack of price transparency for skyrocketing medical costs 

Providers' thirst for mergers has yet to be slaked, and several high-profile deals have been announced already this year. Sanford Health and the Evangelical Lutheran Good Samaritan Society—two of the largest employers in South Dakota—are moving forward with a deal, and Bon Secours Health System and Mercy Health announced plans to merge and form the country's fifth-largest Catholic health system. 

There were more mergers announced in the first quarter of 2018 than that same quarter in 2017 or 2016, according to an analysis from Kaufman Hall, and the value of healthcare mergers is also on the rise. 

However, experts warn that consolidation rarely pays off for patients in the form of lower costs, and that these deals can actually pose significant safety risks.

Suggested Articles

CaaS is a library of up-to-date, accurate health information ready to do your bidding. Learn what structured content can do for you.

Providers are getting an additional five months to comply with new regulations aimed at improving data sharing.

Here's a look at which specialties are still seeing the most growth.