CommonSpirit Health, a nonprofit system based in Chicago, is buying five hospitals to expand its footprint in the western US, despite the challenging operating environment that continues to weigh on the healthcare industry. .
CommonSpirit said Wednesday that it will acquire Steward Health Care locations in Utah, including more than 35 clinics and five hospitals—Davis Hospital and the Medical Center in Layton; Jordan Valley Medical Center in West Jordan; Jordan Valley Medical Center-West Valley Campus; Mountain Point Medical Center in Lehi; and Salt Lake Regional Medical Center in Salt Lake City—for an undisclosed amount.
Centura Health based in Centennial, Colorado will manage the operations.
The transaction is expected to close by the end of the year.
“Though it is bittersweet, this transition will allow Steward to reinvest in our value-based care model and maximize its impact in other regions while allowing Centura to leverage its impressive scale to enhance care and improve outcomes for patients in Utah,” said Steward CEO, Dr. Ralph de la Torre said in a press release.
For-profit system HCA Healthcare had sought to buy five hospitals in 2021 to expand its presence in Utah, but it rescinded the proposed deal less than a year later due to Commission objections. Federal Trade Commission.
The announcement follows news Tuesday that CommonSpirit and Alamonte Springs, Florida-based AdventHealth will be ending their longtime Centura Health joint venture, which was founded in 1996 and has reached “natural maturity” “, according to health systems. CommonSpirit has agreed to operate 15 of Centura’s 20 hospitals in Colorado and western Kansas.
Also on Wednesday, CommonSpirit reported net income of $200 million for the second quarter of its fiscal year 2023, which ended June 30. That’s a 45% increase from a year ago, at a rate $719 million in investment income.
However, the quarterly operating loss amounted to $474 million, in part due to a 5.4% drop in patient net sales. CommonSpirit attributes this result to the COVID-19 pandemic, high labor costs and inflation, along with a cybersecurity attack discovered in October that affected more than 600,000 people.
Revenue fell 6.6% to $8.3 billion and operating expenses also dropped 2.1% to $8.77 billion. Costs for wages and benefits amounted to $4.51 billion, compared with $4.59 billion in the same quarter of fiscal 2022.
