The for-profit hospital is placing greater emphasis on revenue from its outpatient facilities in an effort to remain financially viable.
A subsidiary of Community Health Systems Inc. will buy 10 urgent care centers in Arizona as the hospital operator balances divestitures and strategic acquisitions.
The definitive agreement for Northwest Urgent Care to purchase the center from Carbon Health comes as CHS relies on outpatient services for financial relief.
The acquisition, expected to close in the fourth quarter, will see Franklin, Tennessee-based CHS expand its integrated care network to more than 80 healthcare facilities in Tucson, Arizona.
“Our strategic investments are accelerating the growth of key access points in our health system and expanding our capacity to serve more patients,” CHS CEO Tim Hingen said in a statement. “In markets like Tucson, we are successfully executing on a strategy that makes care more accessible and convenient, further improving our competitive position and creating value for all stakeholders.”
CHS peers are also making their case in the outpatient care arena.
Another major company, HCA Healthcare, said in November that it wants to add 12 to 20 outpatient facilities for each inpatient hospital over the next few years. Chief Operating Officer John Foster said the company plans to spend $2 billion roughly evenly on new inpatient and outpatient facilities.
For CHS, outpatient services have been instrumental in the system’s financial recovery in recent quarters, with increases in outpatient and same-store procedure volumes in the second quarter helping the operator cut its net loss to $13 million from $38 million in the same period in 2023.
“We are committed to providing consumers access to outpatient care where they want and need it, which will enable us to continue to further grow our total spend share in our markets,” Hintgen told investors on the company’s second-quarter earnings call.
Demand for outpatient services has increased over the years, making it a lucrative investment for service providers: Urgent care centers increase utilization but without some of the costs associated with inpatient facilities.
CHS has said it also seeks to expand its inpatient business, even as the system is divesting businesses to restructure its portfolio.
In July, CHS announced a definitive agreement to sell three Pennsylvania hospitals to Woodbridge Healthcare for $120 million as part of a plan to sell $1 billion in hospitals this year.
