Universal Health Services (NYSE: UHS) has announced its plans to sell River Crest Hospital, a well-established psychiatric and addiction treatment facility in San Angelo, Texas, to Shannon Health System, a nonprofit healthcare provider based in the same city. This move signals a significant change for both the River Crest facility and the broader behavioral health landscape in San Angelo. While the terms of the deal have not been disclosed, the acquisition is expected to close by September, according to a recent news release. The sale represents an important shift in the community’s healthcare resources, expanding Shannon Health System’s behavioral health division and offering new opportunities for growth and service expansion.
For more than three decades, River Crest Hospital has served the San Angelo community, providing essential psychiatric care to adults and children. With 80 acute psychiatric beds, the facility has played a crucial role in addressing the mental health and addiction treatment needs of local residents, as well as providing care to military personnel. In this blog post, we’ll explore what this acquisition means for the future of behavioral health services in San Angelo, the details of the deal, and what it could mean for patients, healthcare providers, and the community at large.
The Changing Landscape of Behavioral Health in San Angelo
Shannon Health System, which operates Shannon Medical Center, has long been a staple in the San Angelo healthcare system. This acquisition of River Crest Hospital comes as part of Shannon’s strategic plan to enhance its behavioral health services, an area that has seen increasing demand over the past few years. Currently, Shannon operates a 22-bed inpatient psychiatric facility for adults and seniors, but this expansion through the River Crest acquisition will significantly increase its capacity and provide a wider range of services.
Shane Plymell, president and CEO of Shannon Medical Center, spoke about the acquisition, stating that the move would expand access to specialized care for community members facing behavioral health and substance abuse issues. “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,” he said in a release. This sentiment reflects a growing recognition of the need for mental health and addiction treatment services, especially in regions like San Angelo, where the demand for such services has risen sharply in recent years.
River Crest Hospital: A Critical Resource for the Community
River Crest Hospital, established more than 30 years ago, has been a vital resource for behavioral health and addiction treatment in San Angelo and the surrounding areas. The 80-bed facility has specialized in providing care for both psychiatric and addiction treatment, offering services to both adults and children, as well as members of the military. This breadth of services makes River Crest a critical part of the region’s healthcare ecosystem.
The facility’s long-standing history in San Angelo has enabled it to develop a deep connection to the community, and its care model has focused on providing a comprehensive approach to mental health, helping individuals address everything from basic psychiatric needs to more complex behavioral health challenges. The hospital’s team of dedicated clinicians and staff has built a strong reputation for delivering compassionate care, and it has been instrumental in improving the lives of many individuals struggling with mental health and addiction issues.
As of 2021, River Crest Hospital reported $33 million in revenue and 2,656 discharges. While these numbers reflect the hospital’s size and scope, they also underscore the demand for psychiatric services in the region. As more people seek treatment for behavioral health conditions, the demand for inpatient and outpatient psychiatric care has only increased. This demand has made the sale of River Crest to Shannon Health System particularly timely, as it allows for the expansion of services at a critical moment.
What Does the Acquisition Mean for Shannon Health System?
The acquisition of River Crest Hospital will greatly enhance Shannon Health System’s behavioral health offerings. Currently, Shannon operates a 22-bed inpatient psychiatric facility for adults and seniors. However, with the addition of River Crest’s 80 acute psychiatric beds, the system will have the ability to serve a larger number of individuals in need of specialized care.
Shannon has already outlined plans to expand the River Crest Hospital facility further, adding 40 additional beds in two phases. This expansion will significantly increase the hospital’s capacity and further solidify Shannon Health System’s role as a leading provider of behavioral health services in the region. These new beds will be added in two stages, each adding 20 beds, allowing for a more gradual and manageable expansion that can be tailored to meet the specific needs of the community.
In addition to expanding the bed count, Shannon Health System plans to upgrade the facility itself, including improvements to equipment and technology. These upgrades are crucial to ensuring that the hospital remains at the forefront of psychiatric care, utilizing the latest advancements in treatment techniques and technology to better serve patients.
The Future of Behavioral Health in San Angelo
The decision to sell River Crest Hospital to Shannon Health System comes after extensive discussions between UHS and Shannon regarding the future needs of behavioral health services in the San Angelo area. Phuong Cardoza, group director of behavioral health at UHS, expressed confidence that this partnership would ensure the continued success of River Crest Hospital in meeting the community’s critical needs.
“Throughout this process, we have been impressed by the conversations we’ve had with Shannon about the current and future needs of behavioral health in the San Angelo community,” Cardoza said. “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.”
The sale of River Crest to Shannon Health System is part of a larger trend in the healthcare industry, where healthcare providers are increasingly seeking ways to meet growing demands for behavioral health services. Mental health care has become a top priority for healthcare systems across the country, and in San Angelo, this acquisition represents a major step toward addressing the mental health needs of the community.
Shannon Health System’s merger with San Angelo Medical Center in 2020 positioned the organization as one of the most prominent healthcare providers in the region. With 25 locations and approximately 3,800 employees, Shannon is already a key player in the area’s healthcare system. The addition of River Crest Hospital will allow Shannon to build on its strengths and expand its behavioral health offerings, making it an even more integral part of the local healthcare ecosystem.
Financial Overview: UHS and Shannon Health System
In terms of financial performance, Universal Health Services (UHS) has seen strong growth in recent quarters, with the company reporting a $3.90 earnings per share in the first quarter, beating analyst estimates. The company also reported $266 million in net income, up 63% year-over-year, which highlights the success of UHS’s overall business model. The behavioral health division of UHS also saw a 19% increase in net income, reflecting the growing demand for psychiatric care.
Shannon Health System, on the other hand, has also shown impressive growth. In the fiscal year ending September 30, 2022, Shannon’s revenue totaled $761 million, marking a 10% annual increase. Operating income increased by 49%, reaching $29.9 million, according to an audit report. This growth reflects Shannon’s ability to successfully manage and expand its operations while meeting the healthcare needs of the community.
Conclusion: A Positive Step for Behavioral Health in San Angelo
The acquisition of River Crest Hospital by Shannon Health System is an exciting development for both organizations and for the community of San Angelo. This deal represents an opportunity to enhance the region’s behavioral health infrastructure, expand access to care, and improve the quality of services available to individuals struggling with psychiatric and addiction issues.
With plans to expand the facility, upgrade its equipment and technology, and increase its bed capacity, Shannon Health System is poised to strengthen its position as a leader in behavioral health care in the region. The acquisition will not only improve the services available to local residents but will also create a more integrated and sustainable approach to addressing the growing need for mental health care in the San Angelo area.
As the healthcare landscape continues to evolve, the partnership between Shannon Health System and River Crest Hospital demonstrates the importance of collaboration and innovation in meeting the needs of the community. For the residents of San Angelo, this acquisition offers new hope and expanded opportunities for receiving the mental health care they need to lead healthier, more fulfilling lives.
