Community Health Systems to acquire 80% stake in two Indiana University hospitals
Indiana University Health to retain 20 percent as it refocuses on growing insurance arm
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Subsidiaries of Community Health Systems are acquiring majority ownership of two Indiana University hospitals, CHS announced Dec. 29.
The subsidiaries will assume 80 percent ownership of the 227-bed IU Health La Porte Hospital in La Porte, Indiana and the 50-bed IU Health Starke Hospital in northwestern Indiana, it said.
Indiana University Health will have 20 percent ownership.
Financial terms were not disclosed.
With the addition of La Porte and Starke hospitals, Community Health Systems of Franklin, Tennessee will operate 11 hospitals in Indiana.
"We will support the work of these hospitals to improve the overall health of their communities by investing capital and expanding resources for physicians and employees to deliver high quality care," said CHS Chairman and CEO Wayne T. Smith. "Economic development efforts in Northwest Indiana between Valparaiso and South Bend and a new relationship with IU Health make these hospitals strong additions to our network of facilities."
Indiana University Health intends to grow its health insurance subsidiary aggressively over the next five to seven years, according to the Indianapolis Business Journal.
IU Health was also among three insurers selected to operate Indiana's Medicaid program.
CHS has also announced plans for a spin-off transaction to create a new, publicly traded company, Quorum Health Corporation, with 38 affiliated hospitals and related outpatient services in 16 states, together with Quorum Health Resources, a subsidiary providing management and consulting services to non-affiliated hospitals.
The transaction is expected to close during the first quarter of 2016.
