Nationwide private-equity backed hospital chain announces shift to nonprofit business model
A nationwide health system of 11 hospitals is dropping its for-profit business model and switching to a nonprofit model, citing its desire to deliver “quality care in rural and mid-sized communities.”
Announcing its plans last Thursday, Quorum Health said the shift will allow it to move away from its current private equity-backed ownership structure, unlocking new ways for its hospitals to receive tax-exempt funding and “philanthropic support” through new partnership opportunities.
One of those opportunities is 340B Drug Pricing Program eligibility, which the health system said will bring $11 million in value every year. Tax exemptions will also bring $13 million in annual savings, it added.
Quorum operates in 9 states, with most of its hospitals serving rural areas. It said 75% of its facilities serve as the sole providers for patients, effectively serving as critical access hospitals in their communities.
The group said the change to a nonprofit business will allow it to reinvest in both the hospitals and the surrounding communities, as part of a “mission-driven” care delivery plan catered to mid-sized markets.
"This transformation marks a new era for Quorum Health," Chris Harrison, CEO of Quorum Health, said in a statement. "The reality is that our industry is constantly facing growing financial, operational, and regulatory pressures. It is becoming increasingly challenging to deliver care and support a strong workforce without pursuing strategic solutions.
“By becoming a nonprofit, we are strengthening our ability to serve rural communities that rely heavily on government-sponsored programs,” he added.
Investment firm serves as majority owner
Based in Tennessee, Quorum spun off from Community Health Systems in 2016. In 2020, it filed for Chapter 11 bankruptcy, which resulted in a restructuring complete with divestitures from hospitals within its previously much larger system.
Goldentree Asset Management, a private equity firm, became the majority owner in 2024 as the health system emerged from bankruptcy. Prior to the filing, Quorum was publicly traded. It’s since become a private company.
As part of the shift, it will join the newly formed QKA Health Corporation, which will manage the nonprofit entity, doing business as Healthside Partners.
It’s unclear what the new role of Goldentree will be in the coming nonprofit organization. However, Quorum confirmed that Harrison will keep his role as CEO, serving alongside a new Board of Trustees made up of “nationally recognized healthcare leaders who bring a depth of experience in sustainable healthcare.”
It also added that it’s receiving over $300 million in new investments to upgrade its hospitals and add new services, with improvements scheduled through 2029.
"This is about the future of healthcare in rural America," Harrison added. "We are building a system that is financially sustainable, community-aligned, and prepared to meet the evolving needs of patients."
Quorum said its current staff of over 3,000 healthcare professionals will be retained during and after the shift to a nonprofit model, including the nearly 200 physicians and advanced care practitioners it has on staff.
The change in its business structure is subject to approval by regulators, but could be finalized in Fall 2026.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.