Community Health Systems is selling its last three hospitals in Pennsylvania
The publicly-traded company has agreed to sell the three hospitals, including Regional Hospital of Scranton and Moses Taylor Hospital to a new nonprofit, Woodbridge Healthcare Inc.
Community Health Systems Inc. has agreed to sell its last three hospitals in Pennsylvania to a new nonprofit company led by Bucks County health-care industry veteran Joshua Nemzoff, Community Health Systems said Tuesday after the stock market closed.
Nemzoff’s WoodBridge Healthcare Inc. has agreed to pay $120 million for Wilkes-Barre General Hospital in Wilkes-Barre and two Scranton facilities, Regional Hospital of Scranton and Moses Taylor Hospital. The sale, which is subject to regulatory approvals, is expected to close by the end of the year.
Community Health’s Pennsylvania holdings peaked at 19 hospitals in 2016, according to SEC filings. Among the early sales were five in the Philadelphia area that Tower Health bought for $423 million in 2017. Numerous hospitals that Community Health sold have since closed, including Brandywine and Jennersville Hospitals in Chester County.
Community Health is based in Franklin, Tenn., near Nashville. CHS is among the nation’s largest for-profit hospital systems. It peaked nationally at more than 200 facilities in 2014. After the sale of the hospitals in northeastern Pennsylvania, CHS will have 68 hospitals in 14 states.
For Nemzoff, who has worked for decades in health care, specializing in helping financially troubled nonprofit health system restructure or sell, WoodBridge represents a significant change in strategy. For five years Nemzoff tried unsuccessfully to buy hospitals through a for-profit company called StoneBridge Healthcare.
Nemzoff and his partners made multiple offers for Tower Health, a nonprofit that got into financial trouble after it bought five of CHS’s hospitals. StoneBridge also took runs at nonprofits Care New England Health System in Rhode Island and Central Maine Health in Lewiston, Maine.
“I decided there’s just no need for us to buy hospitals as a for-profit. The only reason you would do that is to make money, and we don’t need to make more money, so I think we’re just doing the right thing,” Nemzoff said.
Most of StoneBridge will be dismantled and the company will have no role in the management of the three CHS hospitals, Nemzoff said. “This is a WoodBridge deal. There’s nobody above WoodBridge. There’s no management contract,” he said.
Ziegler, an investment bank, is providing WoodBridge’s financing to complete the deal, but the organization plans to refinance the debt through the issuance of tax-exempt bonds, Nemzoff said. The IRS approved WoodBridge’s federal income tax exemption as a 501(c)(3) in a letter dated June 21.
The three hospitals had a combined $587 million in revenue in the year ended June 30, 2023, according to American Hospital Directory, a website that compiles Medicare cost report data. All three lost money that year, the directory said.
Nemzoff said WoodBridge intends to recognize existing union contracts with SEIU Healthcare Pennsylvania and the Pennsylvania Association of Staff Nurses & Allied Professionals.
WoodBridge has hired Don Steigman as president, overseeing hospital operations. Until recently Steigman was president and chief operating officer at a large health system in Miami-Dade County, Fla. As CEO of WoodBridge, Nemzoff’s job will be to find more deals, Nemzoff said.