Hamilton Health Care System in Dalton has agreed to buy the biggest hospital in Cleveland, Tennessee, for $160 million as the nonprofit hospital plans to expand into Southeast Tennessee, according to an announcement of the purchase.
The 351-bed Tennova Healthcare Cleveland and related medical offices and subsidiaries will be sold by Community Health Systems, which has operated the Cleveland hospital under the Tennova name for nearly a decade. Pending regulatory approvals, the hospital sale is expected to be completed in the third quarter of 2024, Community Health Systems said in an announcement Thursday.
"As a not-for-profit and one of the few remaining independent health systems in the region, above all, we are committed to the well-being of our region and keeping care local to the communities we serve," Hamilton Health Care System CEO Jeff Myers said in a statement issued by the Dalton, Georgia-based hospital. "Hamilton Medical Center and Tennova Healthcare Cleveland share a proud history of serving the members of our respective communities — our friends, families and neighbors — and we will invest in furthering that legacy to ensure long-term stability, the availability of advanced, comprehensive expert care, and a best-in-class patient experience."
Hamilton Health Care System said the hospital purchase includes physician clinic operations and outpatient services. Company officials declined Friday to discuss financing details or any future plans if the purchase of the Tennova hospital is approved by regulators and finalized this year.
The purchase could more than double the number of hospital beds and staff of Hamilton Health Care System, which is a nonprofit governed by a 10-member board of directors. The Dalton-based flagship of the system, Hamilton Medical Center, is a 255-bed regional acute-care hospital, and Hamilton Health Care also has affiliated physician practices and walk-in care centers.
In a statement, the head of the Tennova hospital in Cleveland praised the prospective buyers and their record in Dalton.
"Hamilton Health Care System has a demonstrated commitment to delivering quality care to the patients they serve," Jarrett Millsaps, CEO of Tennova Healthcare Cleveland, said in a statement. "Our tradition of delivering medical services close to home will be enhanced through this alignment and the dedication and skill of our medical staff and employees."
(READ MORE: Tennova hospital in Cleveland seeks to change its culture)
In a news release, Hamilton Health Care System said the goal of the hospital purchase and merger "is to further enhance care delivery and health care decision-making while empowering local care teams and advancing diagnosis and treatment capabilities.
"Hamilton Health Care System anticipates the hospitals' complementary platforms will make the area more attractive for clinicians specializing in medical subspecialties, bringing additional services to the region and improving health care overall," the company statement said.
Tennova Healthcare Cleveland was originally the county-owned Bradley Memorial Hospital. It was later sold to Community Health Systems and went through several restructurings and rebrandings before what was then known as Sky Ridge Medical Center became Tennova Healthcare Cleveland in 2015.
The Tennova name is shared by seven health systems across Middle and East Tennessee — all of which are part of Community Health Systems.
The sale of the Cleveland hospital is among $1 billion of potential hospital dispositions being considered this year by Community Health Systems, one of the nation's largest for-profit hospital companies with 71 hospitals under ownership or management across the country.
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Last year, Community Health Systems sold nine of its hospitals, and the hospital chain has disposed of 15 hospitals over the past three years, according to the company's 2023 annual report.
But the U.S. Federal Trade Commission in January objected to a proposed $320 million sale of two North Carolina hospitals by Community Health Systems to Novant Health. The FTC sued in federal court to block the proposed sale, alleging the deal would lessen competition, raise prices, and reduce incentives to invest in quality and innovative care that would benefit patients.
"Hospital consolidations often lead to worse outcomes for nurses and doctors, result in higher prices and can have life-and-death consequences for patients," Henry Liu, director of the FTC's Bureau of Competition, said in a statement opposing the planned hospital sale.
In its annual report issued earlier this year, Community Health Systems said it has sold some hospitals and related businesses "and may give consideration to divesting certain additional hospitals and non-hospital businesses."
"Generally, these hospitals and non-hospital businesses are not in one of our strategically beneficial service areas, are less complementary to our business strategy and/or have lower operating margins. In addition, we continue to receive interest from potential acquirers for certain of our hospitals and non-hospital businesses," the company said.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.
