Community Health Systems, which has been paying down its debt by unloading a number of underperforming hospitals, has fired Brian Bauer, the CEO of the CHS-owned Lutheran Health Network, in a further sign of financial distress for the company.
The firing comes in the wake of failed efforts by a physician-led group to fund a buyer for the Fort Wayne-based eight-hospital system, according to published reports. CHS also let go of Aaron Garafola, CEO of LHN's Dupont Hospital.
Last month, the physician group offered to buy at least eight hospitals from CHS, but CHS rejected the offer, claiming it was at least $1 billion below what would have been considered satisfactory. The group has reportedly not given up on its efforts to spark interest in the sale. The initial buyout offer, supported by more than 100 physicians, was reportedly in the vicinity of $2.4 billion.
A statement from CHS said Bauer was terminated because his position had become "untenable," and highlighted the company's commitment to pump $500 million in upgraded technology and facilities into LHN.
The Fort Wayne system posts revenue of about $1.1 billion annually, but despite its financial performance CHS posted a net loss of $1.7 billion in 2016 and is currently selling 30 hospitals to eat into about $15 billion worth of debt.
Mike Young, a healthcare consultant, will serve as interim chief operating officer of Lutheran while a replacement is sought.
CEO Wayne Smith said last month that the company would focus less on hospital divestiture in the future as it seeks to climb out of its financial hole.