Healthcare is shifting to a multi-region model and the number of health systems operating in multiple states is rapidly increasing.
The trend is becoming more prominent as health systems diversify portfolios, increase their bargaining power with payers and vendors and pursue further economies of scale amid challenging financial headwinds.
The Federal Trade Commission also has challenged several recent in-market hospital deals, which has driven health systems to increasingly look outside their traditional service areas to expand.
Here are six health systems that recently acquired or plan to acquire hospitals in a new state:
1.Ontario, Calif.-based Prime Healthcare in March acquired eight Illinois hospitals from St. Louis-based Ascension. The transaction increased the number of hospitals in Prime's portfolio to 52. Prime has committed to invest $250 million in facility upgrades, capital improvements, technology investments and system upgrades at the hospitals, which include:
- Ascension Holy Family (Des Plaines)
- Ascension Mercy (Aurora)
- Ascension Resurrection (Chicago)
- Ascension Saint Francis (Evanston)
- Ascension Saint Joseph-Elgin
- Ascension Saint Joseph-Joliet
- Ascension Saint Mary-Chicago
- Ascension Saint Mary-Kankakee
Prime also plans to acquire Lewiston-based Central Maine Healthcare, an integrated health system with three hospitals, a cancer center and network of physician practices. As part of the deal, Prime has agreed to invest $150 million in CMH facilities over the next five years. The deal is expected to close by the end of the year, pending regulatory and closing conditions.
2. Greenville, S.C.-based Prisma Health on Dec. 1 acquired Blount Memorial Hospital, a 304-bed community hospital in Maryville, Tenn. Blount Memorial is the first hospital to join Prisma outside of South Carolina. The 19-hospital system plans to invest at least $364 million into Blount Memorial.
"Expanding to desirable nearby markets with respected regional hospitals like Blount Memorial strengthens our scale, capabilities, relevance, resources, and attractiveness to top talent and industry partners — all attributes of leading health care organizations," Prisma President and CEO Mark O'Halla said.
3. Orlando (Fla.) Health acquired a 70% ownership interest in Birmingham, Ala.-based Brookwood Baptist Health from Dallas-based Tenet Healthcare, effective Oct. 1. The transaction was valued at $910 million in cash with about $790 million in after-tax proceeds. Brookwood remains an owner in the partnership with Orlando Health. The deals saw the Florida system expand into Alabama and it manages daily operations of Brockwood's five hospitals, which include:
- Brookwood Baptist Medical Center (Birmingham)
- Princeton Baptist Medical Center (Birmingham)
- Walker Baptist Medical Center (Jasper)
- Shelby Baptist Medical Center (Alabaster)
- Citizens Baptist Medical Center (Talladega)
4. Dalton, Ga.-based Hamilton Health Care System on Aug. 1 acquired Tennova Healthcare-Cleveland (Tenn.), a 351-bed hospital from Franklin, Tenn.-based Community Health Systems. The $160 million deal saw Hamilton enter the Tennessee hospital market. The nonprofit, independent health system also rebrandedto Vitruvian Health as part of its regional expansion.
"As a not-for-profit and one of the few remaining independent health systems in the region, above all, we are committed to the well-being of our region and keeping care local to the communities we serve," Hamilton President and CEO Jeff Myers said. "Hamilton Medical Center and Tennova Healthcare-Cleveland share a proud history of serving the members of our respective communities … and we will invest in furthering that legacy to ensure long-term stability, the availability of advanced, comprehensive expert care, and a best-in-class patient experience."
5. Kansas City-based University of Kansas Health System on July 1 acquired Liberty (Mo.) Hospital. The transaction sees KU Health grow into a nine-hospital system, including seven acute-care hospitals and two behavioral health facilities. Liberty Hospital is its first hospital in Missouri.
Notably, 35% of KU Health's patients come from Missouri, making it "a perfect opportunity to partner with another independent hospital in a prime area for our health system," Bob Page, president and CEO of the health system, told Becker's. "We also have that cultural compatibility, so it was pretty much a no-brainer for us to pursue."
6. Flint, Mich.-based Insight Health System acquired Coldwater (Mich.) Regional Hospital from Toledo, Ohio-based ProMedica on Dec. 1. The 87-bed hospital, now Insight Hospital and Medical Center Coldwater, comprises 430 employees and has a level 4 trauma designation.
In November, Insight also took over Trumbull Regional Medical Center and Hillside Rehabilitation hospital, both in Warren, Ohio, from Dallas-based Steward Health Care. Insight now includes six acute-care hospitals, six surgery centers, 580 physicians and about 4,200 employees.