Becker's Hospital Review

50 CFO / FINANCE Steward Health Care finalizes partnership to provide healthcare services in Malta By Alyssa Rege B oston-based Steward Health Care, the largest hospital operator in the U.S., finalized a public-private partnership to assume control of several public medi- cal facilities in Malta, the health system an- nounced Feb. 20. e partnership was the result of Steward's purchase of various medical facilities previ- ously entrusted to healthcare facilities man- ager Vitals Global Healthcare in Floriana, Malta, in Europe. As part of the deal, Steward will also operate and invest in campus facilities for various healthcare organizations and schools located on the island, and offer its hospitals as teach- ing facilities for medical school students. "Steward's innovative care model has suc- cessfully helped patients across the United States receive high-quality care while re- ducing medical expenses," said Ralph de la Torre, MD, founder, chairman and CEO of Steward Health Care. "We look forward to implementing this new model of exceptional care in Malta. We will invest in the medical facilities entrusted to us, upgrading them into state-of the-art hospitals, and will help ensure that the Maltese people live healthy, active lives." n CHS sees Q4 net loss widen to $2B By Ayla Ellison C ommunity Health Systems, a 127-hospital chain based in Franklin, Tenn., posted a net loss of $2 bil- lion in the fourth quarter of 2017, compared to a net loss of $220 million in the same period of the year prior. CHS said revenues dipped to $3.1 billion in the fourth quar- ter of 2017, down 31.6 percent from $4.5 billion in the same period of 2016. The decline was primarily attributable to a $591 million increase in contractual allowances and provi- sions for bad debt. An 18.6 percent increase in expenses as well as one-time charges took a toll on the company's bottom line. CHS said its fourth quarter financial results included nearly $1.8 bil- lion in impairment charges and losses related to the sale of some of its hospitals. To improve its finances and reduce its heavy debt load, CHS put a turnaround plan into place in 2016. As part of the ini- tiative, the company announced plans in 2017 to sell off 30 hospitals. CHS completed the divestiture plan Nov. 1, 2017. With the help of proceeds from the hospital sales, CHS brought down its long-term debt load from $14.8 billion at the end of 2016 to $13.9 billion at the end of last year. To further reduce its debt, CHS plans to sell another group of hospitals with combined revenue of $2 billion. "In 2018, we remain committed to growth initiatives to ad- vance our competitive position, including expanding our transfer and access program across our networks, launch- ing accountable care organizations, and strategically ex- panding outpatient services," said CHS Chairman and CEO Wayne T. Smith in a statement. "We are also committed to driving operational efficiencies, and, as always, are dedicat- ed to patient safety and clinical advancements that improve healthcare for the patients and communities we serve." n Tenet's net loss increases to $230M, says $1B hospital divestiture plan is on track By Ayla Ellison D allas-based Tenet Healthcare, which operates 74 hospitals, saw its net loss widen in the fourth quar- ter of 2017. The for-profit hospital operator ended the fourth quarter of 2017 with revenues of $5 billion, up from $4.9 billion in the same period of the year prior. On a same-facility basis, pa- tient revenue was up 6.1 percent year over year in the fourth quarter of 2017, with adjusted admissions up 1.3 percent. After factoring in operating expenses, a $252 million write-down of the company's deferred tax assets due to the Tax Cuts and Jobs Act, and a $22 million year-over- year increase in noncontrolling interest expense, Tenet reported a net loss of $230 million in the fourth quarter of 2017. That's compared to the fourth quarter of 2016, when the company posted a $79 million net loss. To improve its financial position, Tenet launched a $250 million cost reduction initiative last year, which involves divesting hospitals in non-core markets and cutting 2,000 jobs, or about 2 percent of the company's workforce. Tenet's hospital divestiture plan is expected to yield more than $1 billion of proceeds. A presentation published with the company's fourth-quarter financial results said the hospital divestiture plan is on track. Tenet sold its last two Philadelphia hospitals in January, and the company said it expects to complete the divestiture of 368-bed MacNeal Hospital in Berwyn, Ill., in March. Tenet is also exploring the sale of Conifer Health Solu- tions, its healthcare business services subsidiary. The com- pany said in December 2017 it expects to decide whether to sell Conifer during the first half of 2018. n

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