How CHS sold 35% of its hospitals and held revenue

Franklin, Tenn.-based Community Health Systems has divested around 35% of its portfolio since 2019, but net revenue has stayed relatively the same, shifting slightly from approximately $13 billion in 2019 to $12.5 billion in 2025.

“The EBITDA is also relatively close, even though we have 35% fewer facilities,” Kevin Hammons, CEO of CHS, said in a Feb. 19 earnings call. 

CHS reported an operating income of $450 million (14.5% margin) in the fourth quarter ended Dec. 31, 2025, up from a $279 million (8.5% margin) in the same quarter last year. Total revenue for CHS was $3.1 billion in the fourth quarter, down from $3.3 billion over the prior-year period and total expenses were $2.7 billion, down from $3 billion in the same quarter last year. 

CHS completed seven hospital divestitures in 2025, with deals closing at regular intervals throughout the year. Three involved partial ownership sales, including 50% stakes in two facilities and an 80% stake in a third, while four others were sold outright. It also sold certain ambulatory outreach laboratory assets in December to LabCorp for $194 million and received an additional $91 million in October related to its August 2024 divestiture of Tennova Healthcare-Cleveland. 

The health system then sold three Pennsylvania hospitals to Tenor Health Foundation for $33 million in cash, including a $15 million promissory note, which closed Feb. 1, 2026. It also off-loaded Tennova Healthcare-Clarksville (Tenn.) to Nashville, Tenn.-based Vanderbilt University Medical Center on Feb. 1, 2026, for $623 million and signed a $450 million deal in January 2026 to sell Crestwood Medical Center in Huntsville, Ala., to Huntsville Hospital Health System.

“As we divest facilities and reduce the number of transactions we’re processing, we can scale those accordingly,” Mr. Hammons said. “Keep in mind, we’ve been adding significant numbers of beds to our existing hospitals, even though we’ve been divesting some hospitals with our capital projects over the last several years.”

Mr. Hammons said CHS has added 500 to 600 beds to its core portfolio over the last three to four years, including freestanding emergency departments, surgery centers and clinics.

The operational moves appear to be paying off on the system’s balance sheet. Jason Johnson, executive vice president and CFO of CHS, said during the call that the health system’s net debt has also fallen from $11.4 billion at the end of 2024 to a projected $9.2 billion once the Alabama sale closes, a more than $2 billion reduction in just over a year.

Following its divestitures, CHS has not completely ruled out other sales.

“We still have some inbound interest as we continue, and probably will always have some inbound interest because we have some very good markets,” Mr. Johnson said. “There are a couple transactions right now that we are in some early stages of discussions, but we are not sure yet whether those will proceed or whether we will be able to get those across the finish line. I would say, in terms of what we have, the interest in selling is certainly dwindling.”

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