LITTLE ROCK — Capella Healthcare, the parent company of National Park Medical Center, said Monday it has reached an agreement in principle with Mercy Health to assume ownership of St. Joseph’s Mercy Health System in Hot Springs.
Mercy Health - which operates St. Joseph’s Mercy, including St. Joseph’s Mercy Health Center and the Mercy clinics - and Capella Healthcare officials announced jointly in Hot Springs on Monday that the “agreement in principle has been signed.”
The agreement allows the two organizations to engage in negotiations toward a definitive agreement.
The transaction is expected to be finalized sometime this summer, St. Joseph’s Mercy Health System Chief Executive Tim Johnsen said in an e-mail sent out Monday afternoon to community leaders.
St. Joseph’s is a 282-bed facility. In Arkansas, Mercy also operates hospitals in Berryville, Rogers and Fort Smith. It is based in suburban St. Louis.
Health-care changes and economic uncertainty are leading to a “more coordinated [health-care] system” in Hot Springs, Dan Slipkovich, Capella’s chief executive officer, said in a news release. The National Park Medical Center is a 166-bed facility. Privately held Capella of Franklin, Tenn., operates 13 hospitals in seven states. In Arkansas, it also operates a hospital in Russellville.
Lynn Britton, president and Chief Executive of Mercy Health, said in an interview Monday at the hospital, “We made a very valiant effort in Hot Springs to try to create a viable, clinically excellent health-care system, and I’m really proud of everything the team has done.
“We’ve reached the point, I think, where it’s clear that the Hot Springs community is best served if the two health-care providers join forces and provide a unified response to the community.
“The local Sisters of Mercy perspective is that they understand. They are disappointed, but at peace with it and supportive of it. A number of them serve on the board and have been involved in the decision for a very long time. While saddened, they are comfortable and think it’s the best thing for the community,” he said.
St. Joseph’s Mercy Health Center had an exclusive insurance arrangement with Arkansas Blue Cross and Blue Shield. Slipkovich said Capella has entered into negotiations with the insurer.
Losing the only nonprofit hospital in the community should not have an effect on the level of care provided, officials for both institutions said.
“If you look at the nature of nonprofits and for-profits, there are more similarities than differences,” Skipovich said.
“At Capella, one in five patients is poor and we’re not paid for those services. As you look across the country, there are very similar numbers for profits and nonprofits. We have to take care of folks in the community, and we’re committed to that,” he said.
Information for this article was contributed by Laurie Whalen of the Arkansas Democrat-Gazette.
Business, Pages 19 on 04/24/2012