Franklin, Tenn.-based Community Health Systems is continuing its portfolio reshaping strategy, with active plans to divest five hospitals across Alabama, Pennsylvania and Tennessee.
This month, the for-profit health system signed a definitive agreement to sell Crestwood Medical Center in Huntsville, Ala., to Huntsville Hospital Health System for $450 million. The deal includes all assets tied to the 180-bed facility and is expected to close in the second quarter, pending regulatory approvals and other closing conditions.
In October, CHS signed an agreement to sell its 80% ownership stake in two joint ventures that own and operate Tennova Healthcare-Clarksville (Tenn.) to Nashville-based Vanderbilt University Medical Center. The $600 million deal includes the 270-bed hospital and its related outpatient businesses.
CHS is also preparing to exit Pennsylvania through the proposed sale of Commonwealth Health, a three-hospital system based in Scranton, to the nonprofit Tenor Health Foundation. That deal, announced in July, includes Regional Hospital of Scranton, Moses Taylor Hospital and Wilkes-Barre General Hospital.
The health system had previously planned to sell Commonwealth Health to the nonprofit WoodBridge Healthcare in a $120 million deal, but the transaction collapsed in November 2024. The proposed sale to Tenor Health Foundation does not include a disclosed purchase price.
CHS’ divestiture plan reflects the system’s broader strategy of refining its portfolio around core markets and reducing debt. Since 2019, the company has paid down more than $3 billion in debt while maintaining revenue and adjusted EBITDA levels comparable to those of earlier years — despite operating nearly 40 fewer hospitals.
CHS ended 2025 with its lowest debt levels in more than a decade and generated positive adjusted free cash flow on a 12-month basis for the first time since mid-2022, according to Executive Vice President and CFO Jason Johnson.
“Many of the hospitals we’ve divested didn’t fit into our network-of-care strategy,” CHS CEO Kevin Hammons told Becker’s. “Refocusing has allowed us to hone in on our core markets, where we have the full continuum of care and can truly leverage our scale.”
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