HOT SPRINGS — The plan for Catholic Health Initiatives to buy Mercy Hospital Hot Springs is moving forward.
Mercy Health of St. Louis and CHI of Denver signed a non-binding letter of intent Oct. 11 to sell the 282-bed Hot Springs hospital to CHI and its affiliate, St. Vincent Health System in Little Rock.
Both companies are negotiating the terms of the deal and hope to have an agreement reached by Dec. 31.
In a press release dated Oct. 14, it stated, “Mercy and CHI recognize the extremely challenging health care environment in Arkansas and agree that enhancing the Catholic health ministry and strengthening access to health care is a key objective of the proposed transaction. Upon successful completion of the transaction, Mercy Hot Springs would be operated as part of an integrated network with SVHS in Little Rock, which is part of CHI.
“Through the transaction, SVHS has committed to preserve existing physician relationships in the community and build new ones as they work to strengthen the ministry in Hot Springs. Medical staff privileges of the physicians at Mercy Hot Springs are not expected to be affected by the proposed transaction. Furthermore, SVHS is committed to creating a strong and integrated regional physician network to sustain and grow the network throughout the state.”
St. Vincent Health System announced that all current Mercy Hospital Hot Springs employees will continue to be employed if they pass the regular CHI employment screening and verification process.
“SVHS also intends to retain the charity care and core health care services currently provided by Mercy in the Hot Springs community, which will be overseen by a local board of community and physician leaders following the transaction.”
The Mercy Health board of directors, St. Vincent Health System board of directors and CHI board of stewardship trustees will have to approve the transfer in addition to federal and state authorities.
Mercy Health tried to sell its hospital to Capella Healthcare, but without Vatican and Federal Trade Commission support it cancelled its negotiations June 27.
The Vatican must also approve the transaction because it involves a religious order — the Sisters of Mercy — selling property worth more than $5 million. The Vatican’s initial reaction to Mercy’s proposal to sell to Capella was not favorable.
Bishop Anthony B. Taylor, who opposed Mercy Health’s initial bid to sell its hospital to a for-profit company, said he was “encouraged” by the proposed sale as “a way for our Catholic health care apostolate to continue Jesus’ healing ministry in Hot Springs and the surrounding areas.”
“I look forward to working with both parties during this period of due diligence and continued negotiations,” he said. “Although the details of any sale must still be finalized and approved, I am hopeful that (former) St. Joseph Mercy’s proposed incorporation into an integrated network with St. Vincent Health System in Little Rock provides an opportunity to reinforce the Catholicity of both institutions, while considering how synergy in the resulting network can improve service to the poor and provide even better service to all the people of central Arkansas.”
Mercy Hospital Hot Springs, founded in 1888, is the only Level II trauma center in Southwest Arkansas and operates an 80-physician clinic organization.
St. Vincent Health System, also founded in 1888, operates the 615-bed St. Vincent Infirmary in Little Rock, the 69-bed St. Vincent North in Sherwood, the 25-bed St. Vincent Morrilton and St. Vincent West, an outpatient campus in west Little Rock. The system also includes a network of clinics, a home health agency, a joint-venture inpatient rehabilitation facility and affiliations with more than 650 physicians.
