The for-profit hospital is further leaning into revenue from outpatient facilities as it aims for financial viability.
Community Health Systems’ subsidiary is buying 10 Arizona urgent care centers as the hospital operator balances divestitures with strategic acquisitions.
The definitive agreement by Northwest Urgent Care to purchase the centers from Carbon Health comes as CHS leans on outpatient services to deliver to financial relief.
Through the acquisition, which is expected to close in the fourth quarter, Franklin, Tennessee-based CHS will expand its integrated health network to more than 80 care sites in Tucson, Arizona.
“Our strategic investments are accelerating the growth of important access points in our health systems and expanding capacity for more patients,” CHS CEO Tim Hingtgen said in a statement. “In markets like Tucson, we are successfully executing strategies that make healthcare accessible and convenient, further improve our competitive position, and generate value for all of our stakeholders.”
CHS’ peers have also been staking a claim on the outpatient side.
Fellow giant HCA Healthcare revealed last November that it wanted to increase its outpatient facilities at each inpatient hospital from 12 to 20 over the next few years, with $2 billion earmarked for a roughly even spend on new inpatient and outpatient locations, according to chief operating officer Jon Foster.
For CHS, outpatient services have aided the system’s financial recovery in recent quarters. Growth in outpatient and same-store surgery volumes in the second quarter allowed the operator to cut its net loss to $13 million, compared to $38 million for the same period in 2023.
“We've been really deliberate about making sure we're putting outpatient access where our consumers want it and need it so that we can continue to capture more of the total share of spend in our markets,” Hingtgen told investors in the second quarter earnings call.
As demand for outpatient services has increased over the years, it has become a profitable investment for providers. Urgent care centers drive utilization but come without some of the expenses associated with inpatient facilities.
While CHS said it is also seeking to grow its inpatient business, the system has pursued divestitures to realign its portfolio.
In July, CHS announced a definitive agreement to offload three Pennsylvania hospitals to WoodBridge Healthcare for $120 million as part of a plan to reap $1 billion in hospital sales this year.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Northwest Urgent Care, a subsidiary of Community Health Systems, signed a definitive agreement to acquire 10 urgent care centers in Arizona from Carbon Health.
CHS, like other sizable health systems, is investing in outpatient services, which have yielded growth for the organization in recent quarters.
At the same time, CHS continues to sell off hospitals in certain markets as it strives for $1 billion in sales this year.