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Pipeline Health to sell hospital, exit Texas

El Segundo, Calif.-based Pipeline Health has agreed a deal to sell White Rock Medical Center in Dallas to Heights Healthcare of Texas. The sale is expected to close on or before Oct. 2.

The planned sale, which would signal Pipeline's exit from the Texas hospital market, comes after several months of unsustainable financial losses at White Rock, according to the health system. Recent cuts — including layoffs and the closure of the obstetrics program —  have brought the hospital's expenses in line with projected revenues.

"Our first goal was to keep this hospital open, and our second goal was to stabilize the hospital's financial condition," Pipeline CEO Robert Allen said in a Sept. 21 news release. "We achieved both of those goals. In considering what was in the best interest of this hospital and this community, Pipeline decided to seek out prospective buyers."

Heights Healthcare, Led by neurosurgeon Mirza Baig, MD, oversees several surgical and acute care facilities in the Houston area, as well as DFW Surgical Hospital in Hurst, Texas.

The company plans to expand several of White Rock's service lines and develop a network of physician-led initiatives that will drive strong hospital partnerships and increase patient volume. It will also assume the hospital's multi-year contract with Paragon to implement a new EHR.

Pipeline and Heights Healthcare will work through a transition period for key functions including those related to revenue cycle and information technology services. 

"This 218-bed hospital is now well-positioned to move forward with a Texas-based owner, while California-based Pipeline focuses attention on its four Los Angeles-area hospitals," Mr. Allen said.

Pipeline emerged from bankruptcy in February, just four months after filing its Chapter 11 petition, and sold two Chicago hospitals earlier this year. Its four hospitals in the Los Angeles area are Memorial Hospital of Gardena, Community Hospital of Huntington Park, East Los Angeles Doctors Hospital and Coast Plaza Hospital. 

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