Sharon Regional Health System said Wednesday it has reached a definitive agreement to be purchased by a unit of for-profit Community Health Systems Inc. of Nashville, Tenn.
No sales price was given in the news release issued by nonprofit Sharon Regional.
The state Attorney General’s Office is holding a public hearing 1 p.m. today in Sharon City Building to hear comments about the deal. It’s standard practice at such hearings for information about terms of the sale, including the price, to be disclosed, according to the Attorney General’s Office.
A hearing in Mercer County Orphan’s Court on the sale is set for Feb. 26 in the courthouse. Both the Attorney General’s Office and the Orphan’s Court must approve the deal.
Reaching a final sales agreement completes five months of negotiations since a tentative deal was announced Aug. 27.
In Wednesday’s news release, Sharon Regional said the deal calls for Community Health to invest a minimum of $75 million in “facilities, services and medical technology’’ over the next five years.
The agreement also outlines continuation of growth of essential services such as medical/surgical, critical care, open heart and vascular surgery, emergency services, and obstetrics. The release goes on to say employees “in good standing’’ would maintain their same posts at the same rate of pay with their years of service recognized.
Further, a local advisory board made up of members of Sharon Regional’s medical staff and community leaders will be in place and the schools of nursing and radiography will continue to operate. The release did not say what the status of Sharon Regional’s board would be under Community Health.
“This is a great day for both Sharon Regional and the community, and one we are very proud to announce,” said William Strimbu, chairman of the board of Sharon Regional. “CHS has an outstanding reputation for high quality and patient satisfaction, and we’re excited to move forward with an organization that will help position Sharon Regional for future long-term success.”
“I am very excited to move forward with our affiliation with CHS,” John R. “Jack” Janoso Jr., Sharon Regional’s president and CEO, said in the news release. “Their recognition of Sharon Regional as a strong community asset and commitment to our region insures we’ll be well positioned to serve our patients moving into the future.”
Ed Newmeyer, a Sharon Regional spokesman, said Wednesday it’s expected the sale will be complete by the end of April.
As previously reported, Sharon Regional’s board said it took a year to review the future of the nonprofit health-care provider by looking at a variety of strategic partnerships. After rejecting overtures to merge with UPMC Horizon, Sharon Regional’s board chose to be acquired by Community Health.
Based in the Nashville suburb of Franklin, Community Health is one of the largest publicly traded hospital companies in the country. It’s also a leading operator of general acute-care hospitals in nonurban and midsize markets throughout the country.
Through its subsidiaries, the company owns, leases or operates 206 hospitals in 29 states with about 31,000 licensed beds. Those facilities include the former Forum Health hospitals in nearby Mahoning and Trumbull counties that are now part of Valley Care Health System of Ohio.
Shares in Community Health are traded on the New York Stock Exchange under the symbol CYH.
Sharon Regional is among Mercer County’s oldest institutions, providing health care services to the region for more than 115 years. With just under 1,800 employees, it is Mercer County’s largest employer.
The local health-care provider operates a 241 licensed-bed acute care hospital in Sharon. Its revenues in fiscal 2013 were $175 million.
Agencies must OK deal
State and federal regulations require a series of conditions be met before the Sharon Regional Health System-Community Health Systems deal can be finalized.
Guidelines set by the state Attorney General’s Office require full disclosure when a nonprofit is sold to a for-profit institution.
Among the things the agency requires be revealed before it gives its blessing to a sale are:
• The sales price.
• A list of ongoing litigation at Sharon Regional.
• How health care in the community will be affected.
• All of Sharon Regional’s operating agreements and management contracts.
• Independent valuations of Sharon Regional’s assets.
• All relevant business contracts involving Sharon Regional.
• Bylaws and endowment information relating to Sharon Regional.
Also, the Attorney General’s Office requires that a fair price be paid for Sharon Regional’s assets.
If a new foundation is created for use of the sale proceeds, it must be independent from any oversight by the for-profit purchaser. It also must be clear how the proceeds of the sale will be used to benefit the community.
The Mercer County Orphans Court would have to rule on the sale and that hearing is set for Feb. 26 in Mercer.
Other state agencies that require certain filings include the departments of welfare and health.
Federal review of the deal would also be required to ensure no anti-trust laws are violated.
No one who spoke to The Herald said he had any reason to believe the deal would be nixed. However, the possibility always exists the Attorney General or another agency could order terms of the deal be adjusted in order for it to pass muster.
One clear beneficiary of the deal is the city of Sharon, which collects no taxes on Sharon Regional’s main asset – its hospital on East State Street, because the health care provider is non-profit and its assets are therefore tax-exempt.
Once the for-profit Community Health buys the health-care provider, the hospital will eventually be added to the tax rolls.
Hermitage would benefit as well because Sharon Regional’s Diagnostic & Imaging Center and other buildings are located there.