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Texas medical center moves to acquire hospital

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Shannon Medical Center has agreed to buy the River Crest Hospital from Universal Health Services, the for-profit system.

A Texas hospital is planning to acquire a behavioral health hospital from Universal Health Services, Inc.

Image: Shannon Medical Center

Shane Plymell, president and chief executive officer of Shannon Medical Center, says the acquisition of River Crest Hospital will lead to better coordination of behavioral health services.

Shannon Medical Center has reached an agreement to purchase River Crest Hospital in San Angelo, Texas. The organizations announced the deal this week, and they said they hope to finalize the transaction in September 2024.

Shane Plymell, president and chief executive officer of Shannon Medical Center, said in a news release that a recent survey identified a lack of behavioral health services as the most pressing need in the region. Shannon Medical Center is based in San Angelo, a city of about 100,000 in western Texas.

Plymell also pointed out that the lack of access to mental health resources is a statewide issue, noting that Texas ranked as the worst state in the nation for behavioral health access by Forbes Advisor.

“This new addition to the Shannon Health System will ensure community members of all ages who struggle with behavioral health and substance abuse issues will have expanded access to specialized care,” Plymell said in a statement.

River Crest Hospital is an 80-bed medical center focused on behavioral health. Shannon currently operates a 22-bed inpatient psychiatric facility for adults. Both facilities provide substance use disorder treatment and outpatient programs.

Universal Health Services, a for-profit system based in King of Prussia, Pa., operates 27 hospitals and more than 330 behavioral health facilities across the United States, Puerto Rico, and the United Kingdom. Universal ranked 299th in the Fortune 500 this year, and has been on the list for more than two decades.

Phuong Cardoza, UHS’ group director for behavioral health, said in a statement that the system has been impressed by Shannon’s assessment of mental health needs in the region.

“Joining Shannon will ensure River Crest can continue to meet this critical community need and to invest in our physicians and staff who provide outstanding care every day,” Cardoza said in a statement.

Shannon has pledged to invest money into new technology and equipment at River Crest, and also plans to expand capacity at the River Crest campus. The medical center says the first phase of a planned expansion of River Crest will add 20 beds, and Shannon plans to add 20 more beds to the facility in the second phase of the expansion.

In addition, Shannon says acquiring River Crest will lead to better coordination of care for patients.

In 2020, Shannon completed a merger with the San Angelo Community Medical Center, which is now known as the Shannon South Campus.

Shannon is a member of the Mayo Clinic Care Network, giving the system access to the expertise of Mayo Clinic physicians. Shannon received an “A” in the Leapfrog Group’s Hospital Safety Grades for the spring of 2024.

There’s been an uptick in hospital mergers and acquisitions this year, which some analysts projected. In the first quarter of 2024, there were 20 announced hospital deals, the most in any first quarter since 2020, according to a report by Kaufman Hall, a healthcare consulting firm.

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