Ventas buys private hospital chain for $1.75 billion
By Vidya L Nathan
(Reuters) - Ventas Inc, a healthcare real estate investment trust, is buying Ardent Medical Services Inc for $1.75 billion to expand its hospitals business at a time when more Americans are seeking healthcare services under the Affordable Care Act.
Ventas' shares rose as much as 6 percent on Monday after the company also said it would spin off its portfolio of skilled nursing facilities.
Privately held Ardent runs 14 hospitals in the United States, with most of them in Texas, Oklahoma and New Mexico — states where enrollments in federal health insurance programs have been high.
U.S. hospitals are getting a stronger-than-expected benefit from an influx of low-income patients whose bills are paid by the government's Medicaid program.
The $1 trillion U.S. hospital market is also benefiting from increasing emergency room visits and an aging population, Ventas said in a statement.
Ventas said the Medicare Payment Advisory Commission has recommended a 3.25 percent increase in Medicare reimbursement rates to service providers for acute-care services for fiscal year 2016.
Nashville, Tennessee-based Ardent's 10 hospitals in Texas, Oklahoma and New Mexico are expected to account for 6 percent of Ventas' net operating income after the acquisition, Chief Executive Debra Cafaro said on a call.
While New Mexico expanded its Medicaid offering to include Affordable Care Act health benefits, Texas and Oklahoma have seen higher enrollments even without the expansion. Continued...