Community Health Systems, which has been shedding hospitals in an effort to raise money and pay down its debt, will be putting even more hospitals up for sale, adding five more to the 12 hospitals already on the block.
Of the 17 hospitals that CHS plans to divest, four will be sold to nonprofit Curae Health. Potential buyers for the remaining hospitals have not yet been found.
In a call with investors on Wednesday, CHS CEO Wayne Smith said the company expects to raise $1.2 billion through the sale of its hospitals and other assets.
The system has been struggling since 2014, when it went forward with a $7.3 billion acquisition of Health Management Associates. Patient volumes at former HMA hospitals have been on the downturn, and the resultant increase in doctor recruitment has strained the company's resources.
"Over the years, we've seen some variability, but our inconsistent performance recently and in the third quarter simply has not been good enough," said Smith during the call. "Operationally, we've experienced a great deal of change over the past few quarters. Assimilation of the HMA hospitals has been more difficult than anticipated."
He said the system expects its tax bill to be considerably lower -- about 15 to 20 percent of income from continuing operations as opposed to the previous 30 to 32 percent. "We think we're on the right track here," said Smith.
Last month, CHS announced it will sell an 80 percent ownership interest in its home health division to regional provider Almost Family for $128 million.
CHS netted $1.2 billion from its spinoff of nearly 40 small or rural hospitals earlier this year, but that transaction is now under legal scrutiny, after a class-action lawsuit was filed in U.S. District Court for the Middle District of Tennessee on behalf of those that purchased the common stock of CHS spin-off Quorum Health Corp.
The complaint alleges that Quorum and certain of its executive officers made false and misleading statements, and/or failed to disclose to investors that many of Quorum's hospitals were underperforming at the time of the spin-off, as well as other "indicators of impairment" that were present at the time. It also alleges Quorum failed to inform investors about the issues, rendering Quorum's public statements "materially false and misleading."