Franklin, Tennessee-based healthcare giant, Community Health Systems (CHS), has reportedly divested its 25-bed Plateau Medical Center (PMC) in Oak Hill, West Virginia, to the affiliates of Vandalia Health. Vandalia Health is the parent company of Charleston Area Medical Center (CAMC).
The transaction, according to businesswire, was put into effect on April 1, 2023.
Details of the Divestiture
Closed on April 3rd, 2023, the sale of Plateau Medical Center is worth roughly $92M. Besides the medical center, the sell-off includes PMC’s outpatient services, physician clinic operations, and respective assets.
The agreement for the Plateau Medical Center acquisition was inked earlier this year.
“As a critical access hospital, Plateau Medical Center plays an important role in the Oak Hill community and beyond,” said David Ramsey, president and CEO of Vandalia Health and CAMC. “We are excited they are joining CAMC and Vandalia.”
Now that the transaction is finalised, CAMC is about to hold sway over the hospital operations and work with the medical staffers as part of its effort to deliver proactive services to the region.
“The staff is terrific,” Ramsey stated. “They do a great job of taking care of the community and the patients that come to them.”
Plateau Medical Center
Previously a for-profit hospital, Plateau Medical Center is a certified 25-bed hospital with more than 315 staff on the Oak Hill campus and in nearby clinics. The specialised services it offers are paediatrics, family practice, emergency medicine, cardiology, internal medicine, and general surgery.
CAMC is a not-for-profit organisation; funds raised from the hospital will be used for the betterment of the state and the people of the Oak Hill area.
CHS Continues with Hospital Sell-off
The divestiture of Plateau Medical Center is one of the potential sell-offs CHS detailed on its final quarter and fiscal year-end 2022 earnings call.
With this transaction, CHS has ceased its services in West Virginia.
The agreement to sell the PCM took shape over two years after CHS had completed the massive divestiture of a hospital program that dropped its hospital count to 79 from its peak at 206.
The CHS now runs 78 acute-care hospitals and around 1,000+ other healthcare sites, including emergency care centres, imaging centres, physician practices, cancer centres, freestanding emergency departments, occupational medicine clinics, and ambulatory surgery centres.
On January 1, 2023, CHS sold Greenbrier Valley Medical Center — a 122-bed healthcare facility based in Ronceverte, W.Va. — to Vandalia Health for a cash consideration of around $85M.
CHS has been selling hospitals recently as part of its effort to improve its financial position while also reducing its heavy debt load.
The hospital giant has encountered significant losses over the past several years, including a $2B loss in the final quarter of 2017.
Overcoming Divestiture Challenges
Whether it’s a spin-off or an equity carve-out, divesting a business asset is a complex transaction that comes with strict time constraints.
For businesses undergoing a divestiture, investing in a high-end carve-out consulting service like Fission Consulting is a sensible business decision.
Industry-leading IT transformation services can mitigate investment risk and help businesses make more informed decisions while significantly accelerating the overall separation timeline.
Community Health Systems, one of the largest publicly traded hospital companies in the U.S., continues hospital sell-off with the divestment of Plateau Medical Center. With this divestiture, CHS has no remaining hospital in West Virginia.
Sohela is an electrical engineer and a self-professed writer with a keen interest in all things tech. When she’s not writing killer content pieces, you’ll find her enjoying tempting foods in her favourite restaurants.