TMH, Hillside, Northside sold to Steward Health Care
WARREN — Community Health Systems Inc. announced Thursday it has sold ValleyCare Health System of Ohio, which includes Trumbull Memorial Hospital, Hillside Rehabilitation Hospital and Northside Medical Center.
The Valley health care facilities are among eight the Franklin, Tenn.-based CHS said it has agreed to sell to subsidiaries of Steward Health Care LLC of Boston.
Also included in the transaction is Sharon Regional Health System in Sharon, Pa.
The sale is expected to close in the second quarter of 2017, subject to customary regulatory approvals and closing conditions, CHS reported.
The company said it will apply proceeds of the transaction to pay down debt.
Wayne T. Smith, chairman and chief executive officer of Community Health Systems, Inc., issued the following statement:
“This transaction is a significant step in our strategic work to optimize our portfolio and operations for the future. These hospitals play an important role in their communities and can benefit from Steward Health Care’s community-based care model going forward.”
A physician at Trumbull Memorial Hospital, who did not want to be identified, said he learned of the sale by word-of-mouth filtering through the staff. According to the physician, some of the doctors at TMH were members of a text group who were informed of the sale by text, and the physician heard of the sale from one of those doctors.
“We’ve heard they pay well but they supposedly work their employees very hard,” the physician said of Steward Health Care LLC.
CHS has announced plans to provide an update on its divestiture activity during its fourth quarter and year-end 2016 earnings report next week.
“I talked to the CEO of Community Health Systems and have been told its medical staff, physicians and total staff are expected to continue providing services as business as usual,” Mayor Doug Franklin said Thursday afternoon. “The sale should not have a negative effect on employees.”
“The company that purchased CHS is a private company, so it is not expected to affect the level of income taxes the city receives,” Franklin said.
Councilman Alford Novak, D-2nd Ward, who has been warning of a potential sale of Trumbull Memorial for several months, said he is concerned about the long term effect of the sale on employment.
“It is something you have to think of anytime a company is sold,” Novak said. “You’re not only concerned about current employees, but also about the sale’s impact on retirees.”
CHS acquired the local hospitals when it bought Forum Health out of bankruptcy Oct. 1, 2010, paying $120 million. Soon after, Northside saw 30 cutbacks in spring 2011 and 53 more that same year in August as part of ValleyCare’s overall 90 full-time equivalent layoffs. In 2014, ValleyCare cut several licensed practical nurses, represented by SEIU 1199, from its roster at TMH.
Last year, the company announced plans to reduce and refine its overall portfolio. Although area officials, ValleyCare workers and community members speculated ValleyCare facilities could be among those to be sold, company leaders declined to comment as recently as Feb. 8 .
When the Tribune Chronicle inquired about the potential sale, Tomi Galin, a CHS spokesman, stated in an email, “Community Health Systems has reported previously that we are working on transactions that will result in the divestiture of some hospitals and other non-hospital operations but we have not been specific about which facilities or markets may be affected. We are highly invested in the future success of all of our affiliated hospitals and the well-being of the communities where we operate. In any market where a divestiture should occur, we will work to facilitate a smooth ownership transition in order to maintain quality of care and continuity of services for local residents.”
In September, CHS confirmed plans to sell four hospitals in Mississippi and Florida to help pay down its debt.
In November, ValleyCare confirmed plans to lay off an unspecified number of employees, but would not say how many employees could be laid off or when, or which positions are to be cut.
At the time, Gabriel Pedreira, communications coordinator for the Ohio Nurses Association, said the union was made aware the job cuts could impact some nurses employed at Northside, a 355-bed facility in Youngstown. Trumbull Memorial Hospital in Warren and Hillside Rehabilitation in Howland are 311-bed and 69-bed facilities, respectively.
In November, the company reported a 9.6 percent drop in its 2016 third-quarter operating revenues, at $4.38 billion, compared $4.85 billion in the same quarter in 2015.
Other facilities included in the sale are Easton Hospital in Easton, Pa., Wuesthoff Health System-Melbourne in Melbourne, Fla., Wuesthoff Health System-Rockledge in Rockledge, Fla. and Sebastian River Medical Center in Sebastian, Fla.
Reporter David Dye contributed to this story.