Two area hospitals make first step in potential affiliation agreement
By: Chelsea Rarrick
Updated: December 14, 2012
It started with a discussion back in December 2011, and now St.
Elizabeth Medical Center and Faxton St. Luke's Healthcare are on the
road to a possible affiliation agreement.
"We wanted to figure out, is there a better way understanding what we believe what's going to happen on the federal and state levels to provide care for our community for the long run," said Faxton St. Luke's Healthcare President and CEO, Scott Perra.
The two hospitals announced on Thursday that they have signed a "Memorandum of Understanding."
This means the organizations can take the next steps to begin financial and legal due diligence processes which will take several months.
"Through the years we've been competitors, and in the eyes of the law we really are not able to exchange much information about each other, so we've talked, and at the highest level we think that there are opportunities, but we do need to really get into some more of the details," said Richard Ketcham, President and CEO of St. Elizabeth Medical Center.
With the affiliation, Mr. Ketcham says there's a certain model in mind for the organizations if everything moves forward.
"What we decided to do is form something called an active parent which would be a common board, but each hospital would still have it's own subsidiary board," said Ketcham.
And Scott Perra says hospitals combining forces is something that people could soon be seeing more of even outside the area.
"A lot of other smaller hospitals have to affiliate with a large hospital because they don't have the resources to be able to provide the services that are going to be required," said Perra.
Mr. Ketcham does say this "agreement of understanding" is more than just an expression of an intent, but an expectation that the two will go forward unless there is some sort of surprise.
He says they hope to have the final approval by the end of next year.
"We wanted to figure out, is there a better way understanding what we believe what's going to happen on the federal and state levels to provide care for our community for the long run," said Faxton St. Luke's Healthcare President and CEO, Scott Perra.
The two hospitals announced on Thursday that they have signed a "Memorandum of Understanding."
This means the organizations can take the next steps to begin financial and legal due diligence processes which will take several months.
"Through the years we've been competitors, and in the eyes of the law we really are not able to exchange much information about each other, so we've talked, and at the highest level we think that there are opportunities, but we do need to really get into some more of the details," said Richard Ketcham, President and CEO of St. Elizabeth Medical Center.
With the affiliation, Mr. Ketcham says there's a certain model in mind for the organizations if everything moves forward.
"What we decided to do is form something called an active parent which would be a common board, but each hospital would still have it's own subsidiary board," said Ketcham.
And Scott Perra says hospitals combining forces is something that people could soon be seeing more of even outside the area.
"A lot of other smaller hospitals have to affiliate with a large hospital because they don't have the resources to be able to provide the services that are going to be required," said Perra.
Mr. Ketcham does say this "agreement of understanding" is more than just an expression of an intent, but an expectation that the two will go forward unless there is some sort of surprise.
He says they hope to have the final approval by the end of next year.
