Mergers of Catholic health systems leaves for-profit operators in a bind

Large, for-profit hospital chains HCA, Tenet Healthcare and Community Health Systems (CHS) may come the biggest losers if recently announced mergers of nonprofit systems go through, as hundreds of hospitals will no longer be options for expansion through acquisition.

Forbes reports these operators are already suffering financially from decreases in same hospital patient revenue, which could be pinned on the transition to value-based care moving more patients to cheaper outpatient settings. One potential solution: these operators may start buying or selling amongst each other, such as HCA buying up CHS, which has seen its shares drop more than 20 percent this year.

“HCA has resumed a focus on accretive consolidation, particularly as more troubled hospital providers such as (Community Health Systems) are putting assets up for sale,” Leerink Partners analyst Ana Gupte said. “It is possible they could continue to intensify their focus on consolidation. Both (Tenet) and (Community) are already focused on divesting underperforming hospital assets with (CHS) keenly focused on reducing its high leverage ratio.”

Tenet itself had floated the idea of sold, but reportedly halted those plans in October. It’s still seeking ways to address its $15 billion in debt and posted a $366 million net loss in the third quarter of 2017.

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