Franklin, Tenn.-based Community Health Systems is continuing its portfolio reshaping strategy, with plans to divest nine hospitals across multiple states — Alabama, Tennessee, Arkansas and Pennsylvania — for more than $1.2 billion this year.
CHS on Feb. 1 completed the sale of Commonwealth Health, a three-hospital system based in Scranton, to the nonprofit Tenor Health Foundation. The system includes:
- Regional Hospital of Scranton (186 beds)
- Moses Taylor Hospital in Scranton (122 beds)
- Wilkes-Barre General Hospital (369 beds).
CHS previously attempted to sell the hospitals to another nonprofit — WoodBridge Healthcare — for $120 million in 2024, but the deal collapsed because WoodBridge was unable to satisfy the funding requirements. Terms of the Tenor Health deal — which saw CHS exit Pennsylvania — were not disclosed.
Earlier this month, CHS signed a definitive agreement to sell four Arkansas hospitals to Joplin, Mo.-based Freeman Health System for $112 million. The hospitals include:
- Northwest Medical Center-Springdale (222 beds)
- Northwest Medical Center-Bentonville (28 beds)
- Siloam Springs Regional Hospital (73 beds)
- Northwest Medical Center-Willow Creek Women’s Hospital in Johnson, Ark. (64 beds)
The transaction is expected to close in the second quarter, pending regulatory approvals and other closing conditions. The deal would double Freeman Health’s hospital footprint to eight and mark its entry into the Arkansas market. It would also see CHS exit Arkansas.
The Arkansas sale builds on a series of divestitures CHS has pursued as part of its broader strategy to streamline operations and reduce debt.
In January, the health system signed a definitive agreement to sell Crestwood Medical Center, a 180-bed hospital in Huntsville, Ala., to Huntsville Hospital Health System for $450 million. That deal is also expected to close in the second quarter.
CHS also plans to sell its 80% ownership interest in two joint ventures — which own and operate Tennova Healthcare-Clarksville (Tenn.) — to Vanderbilt University Medical Center. The $600 million deal includes the 270-bed hospital and its related outpatient businesses.
The company’s divestiture strategy reflects a broader effort to focus on core markets and strengthen its financial position. CHS has sold roughly 35% of its hospital portfolio in recent years and now owns or leases 65 hospitals and more than 900 care sites across 13 states.
Since 2019, CHS has reduced its debt by more than $3 billion while maintaining revenue and adjusted EBITDA levels comparable to earlier years, despite operating significantly fewer hospitals.
The for-profit health system ended 2025 with its lowest debt levels in more than a decade and reported positive adjusted free cash flow on a 12-month basis for the first time since mid-2022, according to CHS 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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