Community Health Systems completed its $194 million sale of ambulatory laboratory services to Labcorp this week, marking another significant divestiture for the struggling hospital chain. The transaction includes assets in 13 states and covers patient service centers along with in-office phlebotomy locations that previously operated under CHS health systems.
The deal, first announced in July, allows CHS to streamline operations while Labcorp expands its diagnostic footprint across multiple states. CHS will retain control of inpatient and emergency department laboratories, continuing to provide lab services for imaging, pre-admission testing and other hospital-based functions.
“Completing this transaction with Labcorp allows our health systems to focus on core services and improve the overall patient experience, aligning with our unwavering commitment to providing high-quality, accessible healthcare to our communities,” said CHS President and interim CEO Kevin Hammons in a statement.
The partnership gives patients broader access to Labcorp’s extensive testing capabilities, including specialty testing menus, data analytics platforms and digital health tools. This transition represents part of CHS’s broader portfolio realignment strategy focused on revenue-generating services and outpatient care delivery.
CHS has been actively divesting acute care facilities across multiple states, including recent hospital sales in North Carolina and Mississippi. The company currently has pending deals to sell three Pennsylvania hospitals and one Tennessee facility as part of its ongoing restructuring efforts.
Labcorp’s acquisition spree continues with this CHS purchase, building on an aggressive expansion strategy. The diagnostic giant paid about $839 million last year acquiring clinical and outreach businesses from major healthcare organizations including Baystate Medical Center, Providence Medical Foundation, Westpac Labs, Invitae and BioReference Health. The company spent approximately $671.5 million on strategic acquisitions during 2023 alone.
This laboratory services consolidation reflects broader healthcare industry trends toward specialized service partnerships. Hospital systems increasingly partner with diagnostic companies to reduce operational costs while maintaining patient access to advanced testing capabilities.
The transaction closed Tuesday with CHS receiving approximately $194 million in cash before accounting for transaction expenses, providing much-needed capital for the financially strained hospital operator.
