Hospital one step closer to selling to Duke LifePoint
A non legally binding document has been signed by MedWest-Haywood to sell all hospital properties to Duke LifePoint Healthcare, a joint venture of Duke University Health System, Inc. and LifePoint Hospitals.
A similar memorandum of understanding was also signed by the WestCare Health System, which affiliated with Haywood Regional Medical Center to form MedWest.
The memorandum, said Frank Powers, MedWest-Haywood board chairman, was hammered out by a board subcommittee. He signed the document about 1 p.m. Wednesday with no fanfare.
“I sat down in Kim’s office, read it for about the hundredth time, and signed it,” he said. “No one was there. It was not a big celebration. But we’re tickled pink to have reached this point.”
The memorandum of understanding outlines the basics of the sale and clears the way for Duke LifePoint to begin the due diligence process.
Jeff Seraphine, LifePoint Hospitals eastern group president, said in all the acquisitions completed by the system, there has been a 100 percent closure point once the memorandum of understanding has been signed.
“And we don’t expect to lose this one,” he said. “We expect to work through this with the team and get it done. There is always plenty to talk about to get to a definitive agreement. It is in everyone’s best interest to work through the hurdles, and I haven’t seen anything that should give us concern.”
Powers said hammering out the memorandum of understanding was a process hashed out in a subcommittee. A resolution adopted after a public hearing in November cleared the way for the memorandum to be crafted and signed by the board chairman.
While the memorandum is a working document, the definitive agreement which won’t be ready for 30 to 90 days, will be the one that lays out the specific details and terms of sale.
The details of the memorandum of understanding haven’t yet been made public, but should be available soon, according to Haywood County Attorney Chip Killian. Permission to release the document has already been granted by two of the three agreement signers, and the remaining party is expected to consent perhaps before the 5:30 p.m. Dec. 16 public hearing at the Haywood County Board of Commissioner meeting.
Seraphine said the next step will involve key members of the Duke LifePoint staff delving into all areas of the hospital and associated properties it has proposed to buy for a minimum of $26.3 million and a promise of $36 million in capital investments in the medical care center over the next eight years.
“This allows us 30 to 60 days to look under the hood, so to speak,” he said. “It’s an opportunity to look specifically at all the information in the hospital and physician practices, get specific information and learn what does on day to day. So far, we’ve been working off limited information contained in a 20 to 30-page document.”
The so-called due diligence period will include plenty of on-site visits from various members of the Duke LifePoint staff. There will also be a review of all the legal contracts, compliance documents, facility maintenance, the coding process, revenue cycle and specific practices in place, to name a few.
“We want to see how this operation works and compare that with everything going on in our other hospitals,” he said. “This allows us to understand what items need to be discussed and develop a transition list for post closure.”
The DukeLifePoint acquisition of MedWest requires a few more steps than may be present in other purchases. A condition of the initial offer was that both hospital systems in the Haywood, Jackson, Swain MedWest affiliation were part of the agreement.
Since WestCare is a private, nonprofit system, the terms of its purchase have not been made public. The change will require MedWest to be dissolved, any entangled assets to be separated and in Haywood, a separate process through the county commissioners.
Part of the legal requirement in public hospital authorities is that two separate public hearings be held before the authority assets are sold. The county commissioners must also sign off on the sale, and are set to receive any proceeds left over from the initial sale price once all debts are satisfied.
The current board has pledged the funds will be placed in a secure account where they can only be used on healthcare-related purposes.