The Announcement
- Mercy Health Partners of Knoxville, TN has signed a Definitive Agreement with Health Management Associates, Inc., a leading national operator of acute care hospitals, which will result in Health Management acquiring or leasing seven of Mercy’s hospitals.
- Hospitals, with licensed beds, included in the transaction are: 401- bed Mercy Medical Center St. Mary’s in Knoxville; 101-bed Mercy Medical Center West in Knoxville; 108-bed Mercy Medical Center North in Powell; 58-bed St. Mary’s Jefferson Memorial Hospital in Jefferson City; 74-bed Baptist Hospital of Cocke County in Newport; 66-bed St. Mary’s Medical Center of Campbell County in LaFollette; and 25-bed St. Mary’s Medical Center of Scott County in Oneida.
- Health Management’s subsidiary will also acquire substantially all of Mercy’s ancillary health care operations (which are licensed to operate 197 beds) located in the Knoxville, Tennessee region associated with the operations of the above hospitals, as well as the former Riverside hospital campus (which is licensed to operate 293 beds).
- The agreement is pending approval by each party and Catholic Health Partners, as well as federal, state and local authorities and the Vatican. The transaction closing date is expected to take place later in 2011.
The Decision Process
- The leaders of Mercy looked proactively and deliberately for a smart, strategic partner. After exploring every option, Mercy’s leadership and Board, along with current owner, Catholic Health Partners, determined that Health Management was the best fit for the organization – strategically, financially and culturally.
- Health Management is the clear choice for Mercy due to their understanding of, and commitment to, Mercy’s mission and values and the company’s success in partnering with not-for-profit, Catholic hospitals, like Mercy, in the past. The Catholic heritage, traditions and directives currently present at Mercy will be honored and maintained.
The Deal Points
- The details of the arrangement are currently being finalized and will be announced when the deal closes later this year.
- Mercy will continue to provide the same high level services currently offered. In addition, the hospitals will continue to follow charity care policies comparable to those currently in place.
- Financial benefits of the partnership include estimated new state and local tax revenues totaling more than $4.5 million annually.
Next Steps
- Mercy and Health Management together begin the regulatory approval process. In addition, leadership from both organizations will work within Mercy to meet with leadership, employees, physicians, and community leaders.
- Right now, Health Management will begin working alongside Mercy to assess operations and determine the best means of organization for Mercy and its facilities. As the partnership is finalized, this relationship will allow us to grow, compete and fulfill our vision of being the leading provider of healthcare in the region.
About Health Management Associates
- For more than years, Health Management Associates, Inc. has successfully partnered with local communities to provide outstanding health care services. Through its subsidiaries, Health Management now operates hospitals in states with approximately licensed beds and dedicated Associates and hosts a total medical staff of approximately physicians. To learn more, visit www.hma.com.