JEFFERSONVILLE — Clark Memorial Hospital’s management team and board of trustees announced Wednesday that they have approved a potential strategic partner for the acquisition of the hospital.
The hospital has selected Regional Health Network of Kentucky and Southern Indiana, a joint venture of Norton Healthcare and LifePoint Hospitals. Regional Health Network was formed in 2012 and acquired nearby Scott Memorial Hospital in 2013.
“We believe we have found the right team of partners in Regional Health Network and look forward to working with the Clark County council and commissioners to explore this potential collaboration further,” said Clark Memorial CEO Martin Padgett in a news release.
The commissioners and county council must approve a memorandum of understanding to allow a deal to move forward. A draft of the memorandum is in the possession of the county’s attorneys now. The commissioners and council also would have final say on the approval of a definitive deal for the hospital.
The proposed partnership between CMH and Regional Health Network would include “providing financial resources to eliminate the hospital’s debt and pension obligations,” and “providing access to capital resources to strengthen and grow the hospital,” according to a CMH press release. Financial details of the proposal made by Regional Health Network to acquire the hospital were not made available.
“Out of respect for the county’s process to review and approve the memorandum of understanding, it is premature to provide specific financial information,” said CMH spokeswoman Susan Friedrich. “Additionally, many of these details are yet to be determined.”
Other benefits of the deal would be continued quality patient care, continuation and expansion of clinical services, “maintaining a local voice in governance of the hospital” and “hiring all active employees and enhancing physician alignment and engagement strategies,” according to the CMH press release.
News of CMH’s approval of the strategic partnership was welcomed by commissioners Jack Coffman and Bryan Glover.
“It appears to be a good fit for Clark Memorial Hospital,” Coffman said. “I think this is a move that will keep our hospital vibrant and in operating order, and also give it the opportunity to become one of the finest hospitals in Southern Indiana.”
Padgett pitched an offer from Norton Healthcare to acquire CMH via balance sheet merger to the commissioners and council last year. That deal would have kept about $52 million in bonds issued in 2009 in the name of the county with the promise that Norton would take over the bond service.
The Norton offer included fully funding the hospital’s pension plan to the tune of about $20 million, the promise of keeping all CMH employees at their current rates of pay, and about $6 million in services to the county over the next five years.
No offer from LifePoint was ever publicly disclosed by county officials. However, the News and Tribune has previously reported that speaking on condition of anonymity, several sources close to the situation said that LifePoint would be willing to assume the bond debt while agreeing to the rest of the terms offered by Norton. LifePoint would also pay Clark County up to $10 million, according to those sources.
“This is an opportunity for LifePoint to basically come in and relieve the county of its obligation on the debt,” Glover said. “This is a plan that will have capital investment over the next decade. ... This is absolutely a better deal that what we were presented with initially.”
The sale of the hospital to Regional Health Network could be completed by this summer, Glover said. County Council Vice-President Brian Lenfert agreed with that estimate.
“I’m happy to hear that Clark Memorial Hospital has options so we make sure we get the best deal for county taxpayers and to make sure that quality health care continues in our community,” Lenfert said.
Attorney Scott Lewis, who is one of the lawyers representing the county in negotiations for the hospital, said a special meeting is being arranged for the commissioners and council to attend. He said he expected financial details of Regional Health Network’s proposal to be disclosed at that meeting, which will likely be scheduled to be held Thursday, Feb. 26.
Lewis is also the attorney for the county council.
Clark Memorial employs about 1,350 people. LifePoint, which operates more than 60 hospitals in 21 states, first met with county officials to discuss acquiring the hospital Jan. 14.