Tenet Healthcare Corporation has reached a definitive agreement with Novant Health for the sale of three hospitals in South Carolina, marking a significant move in the healthcare industry.
Tenet Healthcare Corporation, a diversified healthcare services company, has announced its decision to sell three of its hospitals in South Carolina to Novant Health for approximately $2.4 billion in cash. This strategic move will allow Tenet to focus on its core operations while providing Novant with an opportunity to expand its network and enhance patient care in the region.
Expanding Novant Health’s Network
Novant Health, an innovative healthcare organization known for its patient-centric care, will acquire Coastal Carolina Hospital in Jasper County, Hilton Head Hospital in Beaufort County, and East Cooper Medical Center in Charleston County. These hospitals are highly regarded in their respective communities for delivering high-quality specialty services.
Revenue Cycle Management Services
As part of the purchase agreement, Tenet’s Conifer Health Solutions subsidiary will enter into a new and expanded fifteen-year contract to provide revenue cycle management services for the South Carolina hospitals and related operations. This partnership will support efficient financial operations and ensure a seamless experience for patients and healthcare providers.
Ambulatory Surgery Partnership
Novant Health and Tenet’s ambulatory facilities operated by United Surgical Partners International (USPI) will enhance their existing ambulatory surgery partnership. This collaboration aims to increase access to high-quality, ambulatory surgical services for communities across the Carolinas, further improving patient outcomes and satisfaction.
Financial Impact and Debt Retirement
The three hospitals included in the sale generated approximately $552 million in revenue, with a pre-tax income of $126 million and Adjusted EBITDA of $150 million for the last 12 months. Tenet estimates recording a pre-tax book gain of approximately $1.6 billion from this transaction. The proceeds from the sale will primarily be used for debt retirement, strengthening Tenet’s financial position.
Anticipated Completion and Regulatory Approvals
The transaction is expected to be completed in the first quarter of 2024, subject to customary regulatory approvals, clearances, and closing conditions. Both Tenet Healthcare and Novant Health are committed to ensuring a smooth transition for employees, patients, and the communities they serve.
Conclusion:
The sale of three Tenet hospitals in South Carolina to Novant Health represents a significant development in the healthcare industry. This strategic move allows Tenet to streamline its operations and focus on its core business, while Novant Health expands its network and enhances patient care in the region. The partnership in revenue cycle management and the collaboration in ambulatory surgical services further demonstrate the commitment of both organizations to delivering high-quality, patient-centric healthcare. As the transaction moves forward, it will be interesting to see the impact on the healthcare landscape in South Carolina and the benefits it brings to the communities involved.