NEW SMYRNA BEACH, Fla.— Health Management Associates is on its way to forging its third deal this year after it was selected to begin negotiations with Bert Fish Medical Center. The public Southeast Volusia Hospital District chose Naples, Fla.-based HMA over Daytona Beach-based Halifax Health. The deal comes after Florida added more oversight of public hospital sales and leases, and also required them to undertake self-evaluations of whether a takeover might be in their best interest. It’s also the epilogue of the bungled deal between Bert Fish and Adventist Health System. Bert Fish’s charitable foundation had successfully sued to stop that deal— arguing that it had been inked in secret and the process was biased in favor of Adventist—which prompted the measure for more openness on hospital takeovers. In a proposal submitted in March, HMA said it would pay $52.6 million to assume the lease and supply inventory for 112bed Bert Fish. The publicly traded hospital company also proposed spending at least $15 million on capital improvements over the first five years, and $40 million over 10 years. HMA estimated that Bert Fish’s conversion from a tax-exempt to taxpaying entity would provide $15 million in new tax revenue to the community. The
chain proposed operating the hospital under an 80/20 joint venture structure with the hospital district. HMA has a large presence in Florida, with 21 hospitals in the state, as well as a statewide clinical affiliation with the University of Florida’s Shands Hospital. The hospital company’s battle with hedge fund Glenview Capital Management, which last week nominated a new slate of directors to replace HMA’s current board, has not knocked it off the acquisition trail. Analysts have viewed its recent deal making success as a vote of confidence. — Beth Kutscher
HOT SPRINGS, Ark.— Capella Healthcare abandoned its bid to buy Mercy Hospital Hot Springs from Chesterfield, Mo.-based Mercy. Capella, an investor-owned hospital chain based in Franklin, Tenn., reached a definitive agreement with Mercy last September to buy the 282-bed hospital and Mercy Clinic. Capella owns a competing hospital in Hot Springs, 188bed National Park Medical Center, and the company noted at the time that completing the deal would depend on clearance from federal antitrust authorities, as well as the Vatican. Mercy and Capella extended the purchase agreement once but said on June 27 that they would spike the deal because of the uncertainty involved in getting those nods. The organizations said the transaction was intended to yield a “stronger, more unified healthcare system” that could compete with larger providers a short distance away in Little Rock, Ark.
AUSTIN, Texas— Seton Health Alliance has entered an accountable care contract with UnitedHealthcare that the organizations said could extend the reach of the Seton ACO to as many as 320,000 Texans covered by the insurer’s employersponsored plans. Seton Health Alliance is a partnership of Seton Healthcare Family (an Austin-based division of Ascension Health) and other providers in Central Texas, including the multispecialty physician group Austin Regional Clinic. It is among 32 ACOs participating in Medicare’s Pioneer model, which is administered by the CMS Innovation Center and began in January 2012. The relationship with UnitedHealthcare, effective Aug. 1, is its first with a private payer. The alliance members will be eligible for incentive payments if they improve their performance on measures such as readmission rates, disease management and prevention. UnitedHealthcare and other large insurers, including Cigna Corp., Aetna and many of the Blues plans, are rapidly forging agreements with providers with payment models that tie reimbursement to quality and cost benchmarks. UnitedHealthcare says the company now ties $20 billion a year in physician and hospital payments to performancebased programs.
Bert Fish Medical Center, above, would be HMA’s third deal of the year.