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Analysis

Quorum Health to Sell California Hospital For Nearly $40M

By Jack O'Brien  
   June 07, 2019

The Brentwood, Tennessee-based hospital operator announced the divestiture of Watsonville Community Hospital.

Quorum Health Corporation announced plans Friday morning to divest Watsonville Community Hospital (WCH), a 106-bed general hospital in Watsonville, California.

The sale of WCH, which was agreed to on May 31 and is slated to close by the end of Q3 2019, is expected to provide Quorum with approximately $35 million to $40 million in total cash proceeds.

The divestiture comes almost one month after Quorum produced its Q1 2019 earnings report, which included mixed financial results.

Related: Quorum Health Finishes Q1 With Mixed Results  

Same-facility net operating revenues for Q1 were $445 million, down $16 million year-over-year, while Quorum managed positive cash flows from operations and cut net losses by $60 million.

Weak outpatient demand hampered same-facility surgeries as well, with the majority of surgery volumes declines attributable to four hospitals. 

Currently, Quorum oversees 26 affiliated hospitals in 14 states.

Much like Community Health Systems, the hospital operator Quorum spun off from in 2016, the for-profit provider market has been marked by financial obstacles in recent years.

In addition to market pressures, Quorum also dealth with the retirement of former CEO Thomas D. Miller in 2018.

Related: Has Community Health Systems Finally Bottomed Out?  

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

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