San Angelo Community Medical Center's Parent Exploring Options for Sale

Community Health Systems, Inc. (NYSE: CYH), the parent of the San Angelo Community Medical Center, 3501 Knickerbocker Rd., is looking for a buyer.

According to a press release on CHS.net, the Franklin, Tennessee company is “exploring a variety of options with financial sponsors, as well as other potential alternatives.”

Bloomberg broke the news early Friday afternoon after observing shares of the corporation surge 16 percent to close at $12.27. Both Bloomberg and The Wall Street Journal note that shares of CYH have plunged the 12 months prior by 75 percent, from a high in the mid-$60s.

The WSJ reported this morning that CHS’s acquisition of 206 hospitals from Health Management Associates Inc. in 2014 has not performed well. CYH managed to spin off lower-performing hospitals from that acquisition into a separate company called Quorum Health Corp.

Bloomberg cites the Affordable Health Act’s expanded coverage as a possible cause. Of the 22 states CYH operates within, only 11 have expanded Medicaid coverage under the ACA. Texas does not offer the expanded Medicaid coverage. CYH may have gambled too much on wider acceptance of ACA, reported Seeking Alpha. Although operating revenue came in at $4.59 billion for the second quarter of 2016, CYH lost $1.43 billion, Bloomberg reported.

“Community Health Systems’ primary focus continues to be on delivering high-quality health services in the communities where we operate,” said Wayne T. Smith, chairman and chief executive officer of CYH in a Monday morning press release. “Our management team is completely committed to efforts that advance clinical excellence, operational and financial performance and growth strategies that will benefit our organization and the customers we serve.”

Out at San Angelo Community Medical Center, the facility CYH owns, business was routine this afternoon.