Some hospital systems are refocusing operations and selling long-term care, nursing homes, and hospice businesses.
Several hospitals have divested adjacent health businesses since the onset of the Covid-19 pandemic. It comes at a time of rising labor costs and a more challenging regulatory environment for post-acute providers.
Why it matters: The latest flurry of sales may indicate that hospital leadership is shifting from an ownership to a partnership model.
ProMedica, based in Toledo, Ohio, Philadelphia’s Jefferson Health, and Cincinnati, Ohio-based Bon Secours Mercy Health, have all sold some inpatient-adjacent business over the past year.
Zoom in: New Jersey-based Hackensack Meridian Health sold 11 of its 14 long-term care facilities last year. They now share a governance model with Complete Care. Both organizations sit on a quality compliance board.
Hackensack’s long-term care facilities were running roughly a $80 million loss.
What they’re saying: “We don’t need to own certain elements of the care continuum that aren’t part of our core business,” Rober Garrett, CEO of Hackensack, told Modern Healthcare. “We will continue to look for joint venture opportunities.”
“Healthcare is a team sport, and I think partnerships are more important now than ever,” said Dr. Baligh Yehia, President of Jefferson Health. “We are constantly evaluating what we bring to the table that enhances patients’ well-being versus what can partners bring to the table.”
What to watch: Analysts at credit rating agency Fitch believe health system divestitures will likely continue over the next two years.
Go Deeper: Read more about hospitals refocusing their business at Modern Healthcare.
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