The Illinois Health Facilities and Evaluation Board approved Quorum Health’s sale of four southern Illinois hospitals to Deaconess Health System.
Evansville, Indiana-based Deaconess, a system of 12 nonprofit hospitals with facilities in Indiana, Illinois and Kentucky, plans to acquire Crossroads Community Hospital in Mt. Vernon, Heartland Regional Medical Center in Marion, Union County Hospital in Anna and Red Bud Regional Hospital.
Deaconess will pay $146 million for the four facilities, the review board staff report said. It will have six hospitals in Illinois if the deal is completed by the end of the year, as expected.
Brentwood, Tennessee-based Quorum, a for-profit system with 21 hospitals across 13 states, sold the hospitals to pay off debt and creditors after it split from the U.S.-based Community Health System. Franklin, Tennessee in 2016 and reorganize Chapter 11 in 2020.
Quorum, which has sold more than a dozen hospitals in the past six years, plans to sell Gateway Regional Medical Center in Granite City, Illinois, to Los Angeles-based American Healthcare Systems, pending regulatory approval. usual determination. That transaction is expected to close in January, after which Vista Medical Center in Waukegan will be the last hospital in Illinois.
Chris Harrison, Quorum’s chief financial officer, said at Tuesday’s review panel Quorum has no capital following bankruptcy restructuring and the COVID-19 pandemic to invest in the four Illinois hospitals it projects intends to sell to Deaconess. meeting.
“We still have two properties in Illinois and are taking a similar approach as we continue to assess what is the right ownership structure and what is best for the community,” he said.
A Quorum spokesperson said in a statement that the system is satisfied with the board’s approval.
“Deaconess will continue to strengthen hospitals and support communities by providing vital healthcare resources,” a spokesperson said.
Deaconess did not respond to a request for comment.
The acquisition is expected to expand Deaconess’s reach, add services in new markets and boost revenue, ratings agency S&P said in November, as it revised its outlook for Deaconess. from positive to stable after issuing debt of $175 million.
Deaconess reported operating income of $45.5 million on operating revenue of $1.6 billion in 2022, down from operating income of $135.2 million on operating revenue of 1.57. billion dollars by 2021, according to unaudited annual financial statements.
Quorum has been struggling since 2016 when it split from CHS, causing a net loss of more than $300 million in 2017 and 2018 combined. The health system said in July 2020 it had met its $500 million debt relief goal outlined in the restructuring agreement after filing for bankruptcy three months earlier.
