Atrium Health is offering to buy a local hospital for $3 billion. Photo: Atrium Health
Hospitals that have pocketed tens of millions of dollars in federal coronavirus bailouts are still pursuing big-ticket mergers and acquisitions.
Why it matters: The pandemic has dried up big parts of hospitals' businesses, and that's why Congress established a $175 billion bailout fund to help them. At the same time, they're spending millions on lawyers and advisers to explore deals that expand their business empires.
Where it stands:
- Advocate Aurora Health and Beaumont Health are in discussions to merge into a giant hospital system spanning three Midwest states. Beaumont has received more than $550 million so far in coronavirus bailout funds, and Advocate Aurora has received $328 million.
- Atrium Health, Duke Health and Novant Health are in a multibillion-dollar bidding war to acquire New Hanover Regional Medical Center in Wilmington, N.C. Atrium has pocketed $149 million, Novant has received more than $80 million and Duke has gotten almost $50 million in bailout funds.
- ProMedica is offering to take over the operations of the University of Toledo Medical Center. ProMedica has received $158 million in coronavirus bailouts.
- Lifespan and Care New England in Rhode Island have rekindled merger talks. The two systems have combined for more than $64 million in coronavirus funds.
Between the lines: The New Hanover situation, in particular, shows that the pandemic isn't slowing down market expansion, especially if the prize is big enough.
- The three cash-rich systems are fighting over a profitable hospital that sits in a growing metro area with a stable workforce and rising household income — which therefore serves a lot of patients with lucrative commercial health insurance.
- Novant CEO Carl Armato highlighted the system's "strong" finances and resources in a June 10 presentation for the New Hanover facility — a much different message from an industry that has said, "This virus has created the greatest financial crisis in history for hospitals and health systems."