AF­TER P. 24. SPE­CIAL FEA­TURE:

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In­dus­try changes foster more M&A ac­tiv­ity

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DOVER, Del.—

Bay­health Med­i­cal Cen­ter com­pleted a $47 mil­lion ex­pan­sion of its Kent Gen­eral Hospi­tal cam­pus. The project, which be­gan in Au­gust 2008, added a 375-space park­ing garage and treat­ment bays to the hospi­tal’s emer­gency room, a spokesman said in an e-mail. The project con­sol­i­dated can­cer care into two sto­ries that in­clude three ra­di­a­tion ther­apy vaults. Also in­cluded in the project are a 7,000-square-foot phar­macy, 30,000-square-foot cen­tral ser­vice build­ing and 3,500-square-foot se­cu­rity depart­ment. YORK, Pa.—

Com­mu­nity Health Sys­tems said it reached a de­fin­i­tive agree­ment to ac­quire Me­mo­rial Hospi­tal, which would be the hospi­tal chain’s 17th hospi­tal in Penn­syl­va­nia. Com­mu­nity said in a news re­lease that the agree­ment calls for the Franklin, Tenn.-based com­pany to build a re­place­ment hospi­tal within five years of the clos­ing date, which is sub­ject to reg­u­la­tory ap­provals that in­clude a re­view by the Penn­syl­va­nia at­tor­ney gen­eral. Fi­nan­cial terms were not dis­closed. Com­mu­nity would pur­chase sub­stan­tially all of the as­sets of the 100-bed hospi­tal and its par­ent, Me­mo­rial Health Sys­tems, which also in­cludes an am­bu­la­tory surgery cen­ter and other out­pa­tient ser­vices. “Af­ter eval­u­at­ing po­ten­tial part­ners, we se­lected Com­mu­nity Health Sys­tems to help us main­tain choice and trans­form health­care in our com­mu­nity,” Me­mo­rial Pres­i­dent and CEO Sally Dixon said in a news re­lease. On Jan. 1, Com­mu­nity closed a deal adding two-hospi­tal Moses Tay­lor Health Care Sys­tem, Scran­ton, Pa., to its hold­ings. “As we con­tinue to ex­pand our op­er­a­tions across Penn­syl­va­nia, we are ex­cited about the prospect of ap­ply­ing our cap­i­tal and man­age­ment re­sources to help serve this grow­ing com­mu­nity,” Wayne Smith, Com­mu­nity’s chair­man, pres­i­dent and CEO, said in its re­lease an­nounc­ing the York agree­ment. Hospi­tal care in York is dom­i­nated by Wellspan Health’s 560-bed York Hospi­tal. BOS­TON—

Gov. De­val Pa­trick is call­ing on law­mak­ers to pass a sweep­ing over­haul of the health­care pay­ment sys­tem in Mas­sachusetts. In his state of the state ad­dress Mon­day, Pa­trick said Mas­sachusetts has to end the “fee-forser­vice” model that re­wards doc­tors and hos­pi­tals for the amount of care they de­liver in­stead of the qual­ity. Pa­trick said the sys­tem needs to be changed to re­ward doc­tors and other health­care providers for co­or­di­nat­ing pa­tient care and fo­cus­ing on keep­ing pa­tients healthy in­stead of treat­ing each ill­ness. Pa­trick said the state also needs to over­haul its med­i­cal mal­prac­tice laws. State law­mak­ers have al­ready said that health­care cost con­tain­ment is a top is­sue for the new year. They say bring­ing costs un­der con­trol is crit­i­cal to main­tain­ing the state’s land­mark 2006 health­care law. RIDGE­WOOD, N.J.—

Val­ley Hospi­tal an­nounced it formed an ac­count­able care or­ga­ni­za­tion. The 446-bed hospi­tal said its ACO jointly ap­plied with At­lantic Health Sys­tem, Mor­ris­town, N.J., to be­come a Medi­care ACO start­ing in April. Ap­pli­ca­tions for the Medi­care pro­gram, which of­fers fi­nan­cial in­cen­tives for health­care qual­ity and cost con­trol, were due Jan. 20. At­lantic Health, which in­cludes Mor­ris­town Med­i­cal Cen­ter and Over­look Med­i­cal Cen­ter in Sum­mit, said the com­bined ACO would in­clude 1,200 doc­tors and op­er­ate across five New Jer­sey coun­ties. The CMS will name its first group of Medi­care ACOS by March 16. Medi­care will con­tract with a sec­ond group of ac­count­able care or­ga­ni­za­tions start­ing July 1, but the CMS does not be­gin ac­cept­ing ap­pli­ca­tions for the sec­ond wave un­til March 1. Ellen Grif­fith, a spokes­woman for the CMS, de­clined to say how many or­ga­ni­za­tions ap­plied to be­come Medi­care ac­count­able care or­ga­ni­za­tions as of April 1. “All I can tell you is that we are very pleased with the num­ber of ap­pli­ca­tions we re­ceived,” Grif­fith said in an e-mail.

AP PHOTO

Pa­trick said Mas­sachusetts has to end the fee-for-ser­vice model.

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