It wasn’t too many years ago that the county decided to divest itself of Beaufort County Hospital. Politics ran high and Community Health Systems (CHS) and University Health Systems, now Vidant, became the last two bidders for the right to lease the hospital and purchase it in the future. The hospital authority voted for CHS, but CHS withdrew their offer due to the political uproar from Beaufort County citizens. I was among those in support of UHS.

My support had much to do with Vidant Regional Medical Center being located in Greenville with several locally leased or owned hospitals. To me, local is better and if there is a true emergency, you will most likely end up at Vidant in Greenville. They are our hub. CHS is a large corporation that was receiving revenue from 150 plus hospitals at the time. CHS is located in Franklin, Tenn. Martin General in Williamston is a CHS hospital.

CHS previously leased and operated the Washington County Hospital in Plymouth but walked away from the hospital as was allowed under the contract terms. HMC/CAH Consolidated is the present owner/operator of Washington County Hospital. HMC/CAH, on May 21, closed the Yadkin Valley Community Hospital before the end of their July 31 lease. Yadkin County has a lawsuit against the hospital operator. Yadkin County had been looking for another hospital operator before the closure but has been unsuccessful. The hospital is owned by the county. Rural hospitals, in general, are under financial stress and many are in danger of closure. Pungo District Hospital, in Belhaven, is one that has closed.

HMC/CAH was at one point considered a possible operator for Pungo District Hospital. HMC/CAH emerged from bankruptcy at the beginning of 2013.

Community Health Systems is listed on the New York Stock Exchange under the symbol CYH. The company is valued at $7 billion by stockholders. Their main strategy is to increase assets, grow revenue and earnings. Those assets that don’t fit are divested.

A couple of years ago, CHS attempted to purchase Tenet Healthcare. Tenet Healthcare operates 81 general care acute hospitals, 18 short-stay surgical centers and 400 outpatient centers throughout the United States. They operate some of the most prestigious hospitals in the country including Hahnemann University Hospital and St. Christopher’s Hospital for Children in Philadelphia. It was a hostile takeover by CHS that failed.

In 2014, Community Health Systems completed the acquisition of Hospital Managements Associates (HMA). At the completion of the acquisition, CHS owned, leased or operated 206 hospitals in 29 states. (CHS Jan. 27, 2014, press release) Over the years, CHS has purchased and sold individual hospitals.

On Aug. 3, 2015, Community Health Systems announced plans to spinoff 38 rural hospitals and Quorum Health Resources into a new company called Quorum Health Corporation. The spinoff divides Community Health Systems into two companies, by size of the community. Quorum Health Corporation will have 3,635 beds and primarily be in communities of less than 50,000. Martin General Hospital is being spun off to Quroum Health Corporation. Quroum Health is about 12 percent of CHS.

Zacks Equity Research on Aug. 13 reported, “CYH continues to stride ahead vigorously with its growth strategy of selling smaller hospital assets and focus on large hospitals, which in turn, promise higher profitability.”

 

What does this have to do with Beaufort County? Well, if CHS had successfully leased Beaufort County Hospital with Washington having less than 10,000 people, Beaufort County Hospital would also have probably been spun off. I don’t know about you, but I am not ready for a spinoff. Hopefully, Vidant will prosper in the future.

The end result is you have two hospital companies, one that has 38 rural hospitals and another that has 160 hospitals in larger more urban communities. Community Health Systems views it as two strong companies, each having unique challenges and opportunities. I view it as separating the poor from the more profitable. I wish those 38 hospitals the best in the future and hope they are successful.

Al Klemm is a retired Beaufort County Commissioner.