Mercy deal signed, approvals still needed for merger

By Wayne Bryan Originally Published October 4, 2012 at 12:00 a.m.
Updated October 3, 2012 at 8:49 a.m.
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— After months of negotiations, an agreement has been signed that will bring together the two major medical centers in Garland County, along with a number of clinics in the area and most of the doctors in the region, under one corporation.

A purchase agreement was signed Sept. 26 that calls for Capella Healthcare, the owner of National Park Medical Center in Hot Springs, to buy Mercy Hospital in Hot Springs from the Mercy Health System.

A proposed takeover of Mercy Hospital, the former St. Joseph’s Mercy Medical Center, was first announced in April, followed by months of audits and research between the two companies.

The importance of the signing is being expressed differently by the two companies. Michael Wiechart, senior vice president and chief operations officer of Capella, called the agreement “an important step” by the organizations “to build an integrated health system that will advance health care for this region for years to come.”

No statements from Mercy executives were made available. However, Barb Meyer, the media contact for Mercy Health System in St. Louis on the purchase issue, said the signing was “not really big news, just another step in the process.”

A statement from both companies called the signing a “definitive agreement,” but federal regulatory approval is required before the purchase can take place. In addition, because of Mercy’s relationship with the Roman Catholic Church, the agreement requires approval from the Vatican. Mercy officials in Hot Springs have previously said the sale of the hospital would require approval by Pope Benedict XVI.

The 282-bed Mercy Hospital in Hot Springs is a nonprofit hospital owned by the Sisters of Mercy, a Catholic order of nuns who opened the hospital 124 years ago.

Capella Healthcare is a for-profit corporation based in Franklin, Tenn., that includes the 166-bed National Park Medical Center that opened in 1954.

When the proposed purchase was announced in April, there were some protests in the community. Eric Jackson, general manager of Oaklawn Park in Hot Springs, resigned from Mercy Health System’s board of directors because of the sale. Jackson said at the time that he wanted Mercy to find another faith-based, not-for-profit organization to take over the hospital.

After the original announcement, Capella and Mercy jointly launched a website that provides information about the purchase process and future plans. The site — www.AdvancingHotSpringsHealth.com — offers answers to questions from patients, doctors and the community, such as, “How can Capella run St. Joseph’s any better than Mercy?”

“First, we clearly hope to gain a lot of synergies and efficiencies by combining forces, which is incredibly important under health care reform,” says an answer to the question posted on the website. “Mercy has run an outstanding organization in Hot Springs for 120-plus years, but what has worked in the past is not sustainable in the future. Health care is changing dramatically, and every community is faced with finding a solution to preserve health care for the future. In this case, it makes a lot of sense for these two hospitals to work together to improve quality and cost efficiency and to compete effectively with the larger health systems in Little Rock.”

Other questions on the website deal with keeping the hospital’s chapel open, doctor staffing at both hospitals, the use of electronic medical records and the future of Mercy clinics in Hot Springs Village.

According to the website, the chapel will remain open to people of all faiths, the doctors of both hospitals will be consolidated into one staff able to use both Mercy and National Park Medical Center, and the clinics in the Village are part of the transaction with Capella. No changes are planned to any of the services now provided in the community.

Mercy Hospital in Hot Springs has been struggling financially for years, according to reports from the hospital.

“Given the environment, we have come to believe that the region will be better served by a unification of health services under one provider,” said Lynn Britton, president and CEO of Mercy Health System in the original announcement in April.

The announcement issued on Sept. 26 said approvals from the Vatican and the federal government were expected to take another 60 to 90 days.

Staff writer Wayne Bryan can be reached at (501) 244-4460 or wbryan@arkansasonline.com.

Tri-Lakes Edition Writer Wayne Bryan can be reached at 501-244-4460 or wbryan@arkansasonline.com.

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