Community Health Systems, the Tennessee-based medical facilities operator that owns Rockwood Health System in Spokane, plans to spin off 38 small-market hospitals into a separate company. 

According to a recent press release, the new company will include Quorum Health Resources, CHS’ hospital management and consulting business, and will be known as Quorum Health Corp. CHS expects to complete the transition in the first quarter of next year. 

None of the Spokane-area facilities, which include Deaconess Hospital, Valley Hospital, and Rockwood Clinic, are listed among those that will be spun off into the new company. 

The facilities that will become part of Quorum operate a total of more than 3,600 licensed beds and are located across 16 states. A majority of them are in cities or counties with 50,000 or fewer residents. In 84 percent of the markets, the hospital is the sole provider of acute-care hospital services. 

The nearest medical facility that is slated to become part of Quorum is McKenzie-Willamette Medical Center, in Springfield, Ore. 

CHS CEO Wayne Smith said in a statement that the transaction will enable Quorum Health Corp.’s hospitals to “focus on the changes in the health care delivery system, which are different in smaller community hospitals than in our larger and more urbanized markets.”

As a result of the spinoff, CHS would lose its status as the largest U.S. hospital company by hospital count, according to published reports. CHS is the Inland Northwest’s second largest health care services network, after Providence Health Care.