CommonSpirit is still negotiating with Essentia and other companies on the Midwest Hospital deal
CommonSpirit Health said on Tuesday that it continues to discuss potential deals for Midwestern Hospitals with Essentia Health, even after the parties Canceled the buyout plan Earlier this year.
Chicago-based CommonSpirit is trying to unload 14 hospitals in Minnesota and North Dakota. Except for one hospital, all other hospitals are important hospitals. It plans to sell them to Essentia, a 14 hospital system in Duluth, Minnesota, until the system cancels the transaction in May.
CommonSpirit’s chief financial officer Dan Morissette said on Tuesday’s investor conference call that since then, CommonSpirit, which has approximately 140 hospitals, has continued to work hard to reach agreements with Essentia and other potential partners on these facilities.
“We haven’t reached a deal yet,” he said. “So at this point, we are not pursuing specific deals, so I want you to know that we support our business and we support our division in the Fargo region.”
An Essentia spokesperson did not respond to a request for comment.
CommonSpirit disclosed in its financial results for the first quarter of 2022 that as of September 30, the total assets of these hospitals and their related clinics and home health businesses were US$387 million and total liabilities were US$62 million.
As of September 30, CommonSpirit’s Midwest division accounted for 8.7% of its total revenue, or $742 million. In addition to North Dakota and Minnesota, the department also includes hospitals in Nebraska, Iowa, and Wisconsin.
It is not clear why CommonSpirit and Essentia abandoned the original plan, but the employee’s opposition may have played a role.Nearly 700 unionized nurses and other medical staff from both systems A petition was sent to the management of Essentia In early May, they noticed that they were worried that the deal would mean less access to patient care, not more as the system touted. Essentia and CommonSpirit cancel the deal Two weeks later.
In the quarter ended September 30, CommonSpirit’s operating margin was minimal: only 0.4%. The operating income of the system this quarter was 8.5 billion U.S. dollars, and the revenue was 34 million U.S. dollars. This is lower than CommonSpirit’s 2.2% profit margin in the same period last year, when its revenue was $7.7 billion and revenue was $167 million.