Innovative strategy strengthens long-term sustainability through a transformative nonprofit conversion

CHICAGO IL, May 21^st, 2026 - Quorum Health was managing a challenging capital structure following its 2020 financial reorganization. While the company had executed significant portfolio optimization and operational performance had strengthened, the organization continued to navigate the challenges of elevated debt costs and ongoing cash flow pressures. At the same time, regulatory changes, industry headwinds, and increasing investment needs across its largely rural hospital network created additional urgency to improve financial flexibility and support long-term sustainability.

Quorum was looking for a solution to strengthen its ability to:

• Continue investing in patient care and facility modernization
• Preserve and improve access to care across underserved rural markets
• Expand partnerships that support community health initiatives
• Enhance long-term financial stability and flexibility

The opportunity

The organization identified an innovative path forward: transition Quorum from a for-profit structure into a nonprofit, community-focused health system.

The strategy centered on creating a newly formed 501(c)(3) organization, Healthside Partners, that would acquire substantially all of Quorum's operations and assets.

This novel monetization structure creates an opportunity to:

• Refinance existing obligations through tax-exempt financing
• Improve long-term liquidity and cash flow
• Unlock nonprofit operating advantages
• Position the organization for sustainable growth and investment

The outcome

The transition is pending regulatory review and customary closing conditions, with an anticipated completion date of Fall 2026. Once finalized, the new nonprofit structure is expected to strengthen Quorum's ability to support long-term growth, preserve access to rural health care, and expand investment across the communities it serves.

Anticipated financial and operational impact:

• Continued operations of all facilities and workforce stability
• Optimized capital structure
• Improved liquidity and cash flow
• Access to tax-exempt financing

Anticipated strategic and community impact:

• Expanded nonprofit partnership opportunities
• Stronger alignment with community mission
• Increased flexibility for strategic investment
• New opportunities for charitable and philanthropic funding

Why it matters

Rural and community healthcare providers are constantly facing mounting financial, operational and regulatory pressures. Quorum's nonprofit conversion demonstrates how innovative capital and organizational strategies can preserve access to care, strengthen financial sustainability and create a stronger foundation for long-term community impact.

The value of a trusted advisor

Kaufman Hall served as lead advisor across every major workstream required to structure and execute the transaction, partnering closely with Quorum's leadership team to help shape strategy, navigate complexity and support execution across each critical phase of the transformation, including:

• Strategic innovation: developed the original conversion concept and guided stakeholder education around feasibility, structure and execution.
• Buyer formation: supported creation of the nonprofit entity, board development and accelerated 501(c)(3) formation activities.
• Transaction advisory: led deal structuring, negotiations and financial modeling as exclusive M&A advisor.
• Capital strategy: serving as exclusive financial advisor supporting tax-exempt financing and long-term capitalization planning.

Read the press release from Quorum Health