- HCA Healthcare is selling four smaller hospitals in Georgia to Piedmont Healthcare for $950 million. The transaction will increase Piedmont’s hospitals by more than a third to 15 facilities, making it a powerhouse provider in the Atlanta region.
- The sale appears to dovetail with HCA’s strategy to focus more on outpatient and home-based procedures and healthcare services. The company suggested it would use the proceeds from the sale to focus on such initiatives.
- The sale reduces HCA’s holdings in Georgia to five hospitals, including the recently acquired Meadows Regional Hospital in Vidalia. However, it is a drop in the bucket for HCA, which currently operates more than 170 hospitals in the United States.
The hospital operator said in a statement the transaction “provides strategic value to HCA Healthcare by increasing financial flexibility for investments in ongoing and future initiatives in core markets.”
HCA has a history of focusing on markets with large and growing populations, which may have also played a role in the latest sales.
The hospitals being sold include 310-bed Eastside Medical Center in Snellville; 119-bed Cartersville Medical Center in Cartersville; and the Coliseum Health System, which includes acute care hospitals 310-bed Coliseum Medical Centers and 103-bed Coliseum Northside and a 40-bed psychiatric facility in Macon. The sale is expected to close in the third quarter of this year.
Although HCA is not shedding its hospitals wholesale, it appears to be exercising a new strategy that expands HCA’s range of services, building out its continuum of care offerings.
Earlier this year, HCA inked a $400 million deal to acquire a majority stake in Brookdale Senior Living’s home health, hospice business and outpatient therapy business.
HCA CEO Sam Hazen said a patient’s home will become an increasingly important healthcare setting.
“We believe homecare provides multiple channels of value for us,” Hazen said during the company’s most recent earnings calls with analysts late last month. “Some of it’s in better case management and discharge planning and some of it is staying connected to the patient.”
Along with the homecare component, Hazen said the company is also investing in rehabilitation facilities, also in the Southeast. “Because of (certificate of need) relaxation in Florida, we have made a large commitment to inpatient rehabilitation facilities in the state of Florida,” Hazen noted, adding that HCA will be investing as much as $300 million into that initiative.
Moreover, HCA is also focused on ambulatory surgery centers, with 10 to 12 under development, according to Hazen.
“We will also invest in urgent care, recognizing that that continues to serve a role in building out the capabilities inside of our markets,” he said.
HCA has weathered the COVID-19 pandemic relatively well — enough so that it returned all $6 billion it received in federal coronavirus relief funds and in the first quarter of this year reported that profit more than doubled year over year to $1.4 billion.
Hospital M&A is expected to occur at a steady clip as the worst of the pandemic recedes, according to Moody’s Investors Service, which also noted that for-profit hospital are increasing investing in services other than traditional hospital settings.