Hospital merger passes first hurdle

SHARON — The proposed merger between Essent Healthcare (owner of Sharon Hospital) and Tennessee-based RegionalCare Hospital Partners has passed its first regulatory hurdle in the state of Connecticut. As of last week, when the plan was first announced, it was unclear which regulatory agencies in Connecticut would have to give their approval for the deal to go through. But by Monday, Sept. 12, one thing was clear at least: The state Office of Health Care Access, which was very involved in the conversion of Sharon Hospital from a not-for-profit to a for-profit entity, will not have to pass judgment on the merger.“The Office of Health Care Access has ruled that a Certificate of Need is not going to be required,” said Kim Fox of the Nashville, Tenn., public relations firm Jarrard Phillips Cate and Hancock, speaking for RegionalCare and Essent.As to who else will have to make a ruling on the merger, she said that remains unclear at this point. “The state Department of Public Health will be involved,” she said. But as for other oversight, she said, ”We have started the process with the state of Connecticut and we are following their lead. There’s not a lot of precedent here. Sharon Hospital is still the only hospital in the state owned by a for-profit. It is a process and we are letting the state take the lead.”When asked for confirmation that it will be part of the regulatory process, Bill Gerish, a spokesman for the Department of Public Health said that the Office of Health Care Access is part of the state Department of Public Health. He said he does not know if anyone else in the state government will have to approve the merger.The proposed merger will combine the four hospitals owned by RegionalCare, which are in Florence, Ala., Muscle Shoals, Ala., Ottumwa, Iowa, and Wilmington, Ohio; and the three hospitals owned by Essent, which the press release from the companies describe as “market-leading, non-urban acute care hospitals.” In addition to Sharon Hospital the company has a hospital in Waynesburg, Pa., and Paris, Texas. The merger will have to be approved by regulatory agencies in each of the states where the companies have facilities.No New York state agencies are expected to have regulatory oversight or input, even though Sharon Hospital has a large number of patients from nearby New York towns.Fox said that the decision to combine the two health-care companies was precipitated by the weak national economy and the coming plans for federal health-care reform. “A larger system can operate from a position of greater strength, especially now with the economic climate and health reform on the horizon,” Fox said.Kim Lumia, who is president and CEO of Sharon Hospital, agreed that the merger strengthens the hospital going forward.“Sharon Hospital benefits from becoming part of a larger organization,” she said. “Obviously, there is more economy of scale and we can share best practices. I have met with the RegionalCare partners and I am excited by the possibilities.”Though she said she cannot comment on the corporate-level decision, Lumia said “the management team here will remain in place as well as all employees in good standing. Day-to-day operations will not change.”Growth will continue to be a big focus for Sharon Hospital, which has upgraded and added services in recent years. “We are opening our wound care center on Oct. 3,” she said. “That’s a service for the entire Northwest Corner community that doesn’t exist now. “We’re not looking to stay at status quo,” she said. The hospital is in excellent shape now, with strong financials and very positive feedback, she said.