CHS takes con­trol of two In­di­ana hos­pi­tals

Modern Healthcare - - REGIONAL NEWS - —Me­lanie Evans

In­di­ana Univer­sity Health in In­di­anapo­lis will en­ter a two-hos­pi­tal joint ven­ture with Com­mu­nity Health Sys­tems as part of its move to scale back its acute-care oper­a­tions.

Pub­licly traded Com­mu­nity Health Sys­tems will ac­quire 80% of not-for­profit IU Health’s hos­pi­tals in La Porte, Ind., and Knox, Ind. It’s part of IU Health’s out­pa­tient care ex­pan­sion and the growth of its health in­sur­ance arm, MD­wise.

IU’s de­ci­sion to di­vest two hos­pi­tals comes af­ter it closed an­other hos­pi­tal in April and an­nounced it would launch a dozen ur­gent-care clin­ics in 2016. Its hos­pi­tal in Martinsville, Ind., which closed last spring, now op­er­ates an emer­gency depart­ment and of­fers out­pa­tient care.

The deal, which is ex­pected to close in the first quar­ter of 2016, will leave IU Health with 15 hos­pi­tals.

IU Health ac­quired hos­pi­tals and physi­cians in a big growth push over eight years. Then came a plan to slash op­er­at­ing ex­penses, in­clud­ing lay­offs, which bol­stered the sys­tem’s op­er­at­ing mar­gin. In Septem­ber, the sys­tem named a new CEO, Den­nis Mur­phy.

IU Health ended the first nine months of the year with an op­er­at­ing mar­gin of 13.2% on rev­enue of $4.5 bil­lion. The sys­tem’s pre­mi­ums from health plan en­rollees in­creased 66% to roughly $300 mil­lion, com­pared with the first nine months of the prior year.

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