MedCath Moves Toward Dissolution
Mayo points to the sale of hospitals in Austin and Phoenix to HCA and Vanguard Health Systems, respectively, as part of that trend. HCA purchased Austin Heart, a major cardiology practice affiliated with the MedCath facility, in December 2009 and was part of the partnership that then acquired the Heart Hospital of Austin in November 2010. In Phoenix, Vanguard Health Systems acquired the cardiology group Arizona Heart Institute in May 2010 and then purchased the Arizona Heart Hospital in October 2010.
In the end, "MedCath realized that the value of its individual assets was worth more than the company as a whole," explains Mayo. For the most part MedCath properties have been acquired by local buyers with strong positions in the local market:
- MedCath Partners was sold to DLP Healthcare LLC, a joint venture between Nashville-based LifePoint Hospitals and Duke University Health System in Durham, NC. The $25 million deal included six hospital-based cardiac catheterization labs and three mobile cath labs in North Carolina. The acquired assets will be operated by DLP Cardiac Partners. (May 2011)
- Coastal Carolina Heart was sold for $5 million to New Hanover Regional Medical Center in Wilmington, NC. (May 2011)
- Arkansas Heart Hospital in Little Rock is expected be sold for $73 million to AR-MED, LLC, which is majority owned by Dr. Bruce Murphy, a physician affiliated with Little Rock Cardiology Clinic, P.A. and a current investor in the Arkansas Heart Hospital. (May 2011)
- Heart Hospital of New Mexico in Albuquerque is expected to be sold for $119 million to Lovelace Health System of Albuquerque. Lovelace is part of Nashville-based Ardent Health Services. (May 2011)
- TexSan Heart Hospital in San Antonio was sold for $78.5 million to Methodist Healthcare System of San Antonio. (December 2010)
- MedCath's 27% minority ownership of Southwest Arizona Heart and Vascular, LLC was sold for $7 million to the joint venture's physician partners. (Nov. 2010)
- The Heart Hospital of Austin was sold for $83.8 million to HCA's St. David's Healthcare Partnership, L.P. (Nov. 2010)
- Avera Heart Hospital in Sioux Falls, SD was acquired by Avera McKennan, a member of Avera Health, a regional healthcare entity with more than 235 facilities in South Dakota, North Dakota, Minnesota, Iowa and Nebraska. Avera McKennan paid $20 million plus an estimated $16 million in cash for the hospital. (Oct. 2010)
- Arizona Heart Hospital transaction was acquired for an estimated $32 million by Vanguard Health Systems. (Oct. 2010)
Four hospitals remain in the MedCath fold: Bakersfield Heart Hospital in California, Harlingen Medical Center in Texas, Hualapai Mountain Medical Center in Kingman, AZ and Louisiana Medical Center and Heart Hospital in Lacombe. No sales details for these facilities could be confirmed with MedCath.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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