The Herald, Sharon, Pa.

July 13, 2013

CEO: Sharon Regional not for sale

Proposed UPMC merger rejected

By Michael Roknick
Herald Business Editor

SHENANGO VALLEY — Over the past month, rumors have swirled that Sharon Regional Health System is for sale and that Pittsburgh-based UPMC had the inside track on the winning bid for the local independent health care provider.

John “Jack’’ Janoso, Sharon Regional’s CEO, and Bill Strimbu, the nonprofit’s chairman, said Friday it is time to put the rumors to rest.

“We are not actively for sale,’’ Janoso said. “We are not seeking a buyer.’’

But, both men acknowledged, talks were held during the past nine months with UPMC about creating joint alliances or “models.’’ UPMC owns UPMC Horizon which has hospitals in Farrell and Greenville.

“The model they proposed was basically to merge with Horizon,’’ Janoso said. “It didn’t meet our guiding principles.’’

In other words, the offer was rejected.

While Janoso didn’t slam the door on future joint ventures, he more than hinted talk about an outright merger is dead.

“UPMC cares about its business model. I care about the community,’’ Janoso said. “I’ve worked my tail off over the past 10 months to try to show and do that.’’

A UPMC spokesman contacted Friday wasn’t familiar with the discussions and didn’t have an immediate response.  

Other opportunities for various partnerships will be looked at and reviewed with other organizations including Highmark and Cleveland Clinic, Janoso said.

Janoso is the third CEO at Sharon Regional in less than two years.

Last September, CEO Linde Finsrud Wilson abruptly resigned with no explanation given. In August 2011, CEO John Zidansek parted ways with the hospital system.

Everyone close to the health provider said the comings and goings have taken a toll on the staff and the board.

“The past couple of years haven’t been our most shinning moments,’’ Strimbu said.

Janoso was picked to fill the CEO chair and, more than anything, Sharon Regional’s board wanted to see staying power at the helm from someone who came up from its internal ranks.

He didn’t have an easy start.

Until recently Sharon Regional was not in a position of financial strength, Janoso and Strimbu acknowledged.

In the fiscal year ending June 30, 2012, Sharon Regional lost nearly 4.5 cents on every dollar of revenue from providing core medical services, according to Fitch Ratings.

For the first six months of the recently ended fiscal year, Sharon Regional’s recorded a net loss, Janoso acknowledged, but he said the last six months showed a profit. Final numbers for the year that ended June 30 are not in yet and he wouldn’t commit on whether the final tally will show a loss or profit.

Barring an “unforeseen circumstance’’ Janoso said he is confident the current fiscal year, which began July 1, will be profitable.

He cautioned the expected improvement in numbers isn’t part of a grand plan to launch Sharon Regional on the market.

“I’m not here to polish the place up and put it up for sale,’’ Janoso said.

Strimbu noted the health care provider’s current budget calls for $8 million in capital improvements with $3 million of that for equipment replacement.

“We’re not in a desperate mode here,’’ Strimbu said.

Talk of building a new $100 million hospital that was championed by Janoso’s predecessor has not merely been shelved, but is now buried and long forgotten. The price tag was thought to be way out of reach.

Instead, the board and Janoso are looking to close a deal this summer to buy the former St. Joseph’s School adjacent to the hospital on East State Street.

Neither man would give details of plans for the property, but both indicated a hospital expansion is clearly in the cards and agreed decisions will remain in local hands.

“We’re still in control of our own destiny,’’ Janoso said.

With around 1,800 employees, Sharon Regional is Mercer County’s largest employer.