Becker's Hospital Review

26 CFO / FINANCE St. Luke's Health Care swings to black in Q1 By Morgan Haefner D uluth, Minn.-based St. Luke's Health Care recorded net income of $6.6 million in the three months ended March 31, turning around a $98,000 deficit recorded in the same period a year prior. The two-hospital nonprofit system attributed the change to a year-over-year 13 percent increase in net patient service revenues, according to recent bondholder documents. St. Luke's Health Care saw admissions increase 14.4 percent during the three-month period when compared to the same period a year prior. The system ended the quarter with $125.4 million in total reve- nue, up 13.9 percent from the same period in 2017. The system also saw operating expenses climb 9.5 percent to $121.3 million in the three-month period when compared to the same period last year. St. Luke's said labor costs and supplies reflected nearly the entire increase in expenses. n CHS divests 3 Tennessee hospitals By Ayla Ellison F ranklin, Tenn.-based Community Health Systems sold three hospitals in Tennessee to Jackson-based West Tennessee Healthcare on June 1. CHS and West Tennessee Healthcare entered into a definitive agreement for the sale of Tennova Healthcare-Dyersburg Regional, Tennova Healthcare-Re- gional Jackson and Tennova Healthcare-Volunteer Martin in late March. The parties completed the transaction after West Tennessee Healthcare secured a $90 million bridge loan from Goldman Sachs to purchase the facilities, according to the Jackson Sun. The three Tennessee hospitals are among a group of facilities with combined revenue of $2 billion CHS intends to sell. CHS will use the proceeds from the transactions to reduce its long-term debt load, which totaled $13.86 billion as of March 31. n Bellin Health Systems nixes deal with Michigan system: 4 notes By Alyssa Rege G reen Bay, Wis.-based Bellin Health Systems and Iron Mountain, Mich.- based Dickinson County Healthcare System terminated their asset purchase agreement May 21, according to TV NBC 6. Here are four things to know about the aborted deal: 1. The organizations signed an asset purchase agreement in December 2017, and had expected to complete the due diligence process within six months. 2. Under the deal, Bellin Health Systems agreed to purchase DCHS for about $40 million to $50 million. But DCHS officials said the health system incurred un- predicted losses, driving up the asset purchase price, according to the report. 3. The health systems reached out to the state of Michigan for financial assis- tance to complete the deal but the state declined to help DCHS. 4. Bellin Health Systems and DCHS will continue to discuss other initiatives to build on their relationship and provide services to the community, the report states. n Healthcare antitrust enforcement remains a top priority for DOJ By Emily Rappleye T he Department of Justice's Antitrust Division is still laser-focused on root- ing out anticompetitive practices in the healthcare industry, according to remarks from Barry Nigro, deputy assistant attorney general, at an American Bar Association con- ference May 17 in Arlington, Va. "Because competition benefits consumers in so many ways, antitrust enforcement will contin- ue to play an outsized role in healthcare," Mr. Nigro said. "Protecting and fostering compe- tition in this space is a responsibility that we at the Antitrust Division take very seriously, and, because of that, antitrust enforcement in healthcare will continue to be a high priority for the Division." e DOJ has prioritized criminal antitrust en- forcement, especially price fixing in the generic pharmaceutical industry. However, as criminal enforcement relates to healthcare providers, the DOJ plans to crack down on market allo- cation agreements and "no-poach" agreements that limit competition for employees, Mr. Ni- gro said. In his remarks, Mr. Nigro celebrated some of the antitrust wins the agency had in the past year, including blocking the Anthem-Cigna merger and Aetna's proposed acquisition of Humana. Beyond payer mega-mergers, the DOJ is also "actively challenging anticompetitive conduct by healthcare providers," he said. For example, the DOJ's Antitrust Division has a trial sched- uled in May 2019 to challenge an "anti-steering" restriction in Charlotte, N.C.-based Atrium Health's payer contracts. e division believes these restrictions keep payers from directing patients to lower-cost providers. e agency also plans to pursue damages in healthcare antitrust cases that harm taxpayers via federal spending. "We intend to exercise the authority Congress has provided and are actively considering cases in this industry to bring," Mr. Nigro said. "We hope that by doing so, healthcare providers will have even greater incentive to invest in vigorous and effective an- titrust compliance." n

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