A joint venture between the Duke University Health System and a Tennessee hospital chain has bought nine heart labs across North Carolina from Charlotte-based MedCath.
It's the second deal for DLP Healthcare since the joint venture announced in February an agreement to run Maria Parham Medical Center in Henderson, a 102-bed hospital about 45 miles north of Raleigh.
DLP is a partnership between the Duke health system and LifePoint Hospitals, a publicly traded company based in Brentwood, Tenn., that operates 52 hospitals in 17 states.
Duke and LifePoint are seeking other deals with community hospitals and other providers. Other health systems, including the UNC Health Care System, also are looking to expand as federal health reform and other factors drive consolidation in the medical industry.
"We recognize that a lot of the community hospitals in non-urban areas are struggling to create access to new technologies for people in their areas," Molly O'Neill, Duke's chief strategic planning officer, said in a telephone interview.
"A lot of hospitals, and boards of community hospitals are evaluating their long-term sustainability and whether they should partner with a larger organization," she added.
In some cases, potential partnerships with community hospitals will involve multiple suitors and multiple offers, but O'Neill doesn't expect bidding wars among large health systems looking to expand.
"Sometimes money is the most important thing," she added. But there are often other factors involved, including whether the hospital board retains control of operations.
O'Neill declined to comment on other possible deals DLP officials are discussing.
DLP paid MedCath about $25 million for the cardiac catheterization labs. One is located at Duke Raleigh Hospital, but officials declined to comment on other locations.
The heart labs are an attractive asset partly because North Carolina's Certificate of Need laws limit the number allowed in each county. And heart care is a lucrative business, with tests that can generate thousands of dollars in revenue.
MedCath operates six hospitals focused on heart care in Arizona, Arkansas, California, Louisiana, New Mexico and Texas. It expects to use the $16 million in proceeds from the sale to repay other debt.