Orlando Health has wrapped up its purchase of five Birmingham, Alabama-area hospitals’ majority ownership stakes from Tenet Healthcare, the systems announced Tuesday morning.
For-profit Tenet previously said the $910 million cash sale of its 70% stake in Brookwood Baptist Health would generate a pre-tax gain of about $375 million and post-tax proceeds of $790 million. It also hashed out a 10-year contract for Conifer Health Solutions, its revenue cycle management services business, to continue providing services to the transacted locations.
The sold-off hospitals are: Brookwood Baptist Medical Center, Citizens Baptist Medical Center, Princeton Baptist Medical Center, Shelby Baptist Medical Center and Walker Baptist Medical Center. Facilities and operations related to these locations are also included in the deal.
“This is a great day for Brookwood Baptist Health and Orlando Health,” Thibaut van Marcke, senior vice president of Orlando Health, who’s slated to lead the Alabama region, said in a release. “Our partnership offers a new day in healthcare for central Alabamians. With our proven track record of successful expansion lifting the care at our partner hospitals, we are dedicated to making this healthcare system the best in the state and beyond.”
The newly acquired Brookwood Baptist Health is a joint venture with Baptist Health System. The faith-based nonprofit will remain a partner with Orlando Health, which is assuming day-to-day operations. Orlando Health also previously said it would be rebranding Brookwood Baptist Health as Baptist Health.
“We’re excited to have Orlando Health as a partner,” Amy Allen, president and CEO of Baptist Health System, said in Orlando Health’s release. “Their dedication to excellence and improving patient care has been repeatedly recognized with national honors from leading quality and patient-safety organizations. This is a great day for our patients, our physicians, our team and our community.”
Orlando Health is a nonprofit, integrated academic system with $6.1 billion in total operating revenue and a nearly $500 million operating income during fiscal 2023. It’s generally maintained that momentum through the first three quarters of its fiscal 2024.
Recent months have seen the system scaling up with the Tenet deal and the purchase of three hospitals from the bankrupt Steward Health Care for $439 million, a deal it expects to close by Oct. 23.
For-profit Tenet, meanwhile, has been realigning its hospital portfolio with several selloffs outside of its core markets. These include a $2.4 billion sale of three South Carolina hospitals to Novant Health, which closed earlier this year, and a definitive agreement with UCI Health to sell four other hospitals for $975 million, which is still pending.
In comments given during investor conferences, CEO Saum Sutaria suggested the company’s operations have become very compelling to potential buyers due to the spending discipline Tenet's executives instilled in their operations.