The University of Cincinnati, Jewish Health System, and Fort Hamilton Hospital and Healthcare Corp. have hammered out an agreement that completes the long-anticipated acquisition of Jewish Hospital by Mercy Health Partners, and leaves the university the sole member of the Health Alliance of Greater Cincinnati.
Jewish Hospital and Mercy Health, both based in Cincinnati, had hoped to complete their $180 million merger shortly after New Year’s Day. However, University Hospital was concerned about the effects on charity care of Jewish Hospital’s departure from the Health Alliance, to which both hospitals belonged.
In late December, Ohio Attorney General Richard Cordray weighed in on the proposed acquisition, asking Jewish Hospital and Mercy Health to postpone their merger until Cleveland lawyer Niki Schwartz could mediate for Health Alliance members.
The result of that mediation is a memorandum of understanding, signed today, that provides for an orderly departure from the alliance for Jewish Hospital and Fort Hamilton Hospital, which announced earlier this month that it would pursue an affiliation agreement with Kettering Health Network, according to a University of Cincinnati release. Prior to the exits, University Hospital owned a 49 percent interest in the health alliance, while Jewish Health System owned 45 percent, and Fort Hamilton owned 6 percent.
The memo, which is expected to be finalized on March 31, helps the former alliance members to avoid costly and unpredictable dissolution and litigation, the university said.
The disagreement between the university and Jewish Hospital illustrated some of the problems of allied hospitals that share operations but not governance. When one member leaves, it takes assets, but not necessarily liabilities, with it. Not only is it difficult to split up assets that are used jointly to operate alliance members, but such a split leaves remaining members with fewer assets — and often more liabilities.
The memo addresses shared responsibilities, and the allocation of jointly owned assets, including West Chester Medical Center, Alliance Primary Care, Drake Center, and the Alliance Business Center, as well as several joint ventures, including Lindner Center of HOPE and University Pointe Surgical Hospital, the university said.
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For instance, Jewish Health System and Fort Hamilton will cease their alliance governance roles by the end of March. But the University of Cincinnati and Jewish Health System will continue to be responsible for Drake Center, a long-term acute care, rehabilitative care and assisted living facility, for 18 months.
During that time, the two institutions will work with Drake Center board members and administrators, elected officials and others to secure the center’s future. The university health system cannot alone support the Drake Center’s losses. The center is pursuing new partners, and five national hospital companies are interested, the university said, citing media reports.
The memo also will enable University Hospital to move forward. In August, the university unveiled plans to form a new health system called UC Health.
“This is the beginning of a very exciting transformation of health care in Greater Cincinnati,” University of Cincinnati President Gregory H. Williams said in the release. ‘Through this agreement, UC Health, the region’s only academic medical center, will strengthen its teaching and research programs that translate discoveries in research into cures for patients.
“UC Health will also operate Alliance Primary Care, one of the area’s largest groups of dedicated primary care physicians offering easy access to patients, as well as University of Cincinnati Physicians, the largest group of physician specialists in almost all disciplines,” Williams said. “UC Health will also operate the brand new West Chester Medical Center and the respected University Hospital and other locations.”
The former alliance members “remain open to future collaboration, and the three characterized the [memo] as a product of compromise, and a document that is both fair and reasonable in its approach and terms,” according to the university’s release.
“We believe this agreement is fair to all parties, and we look forward to Jewish Hospital’s future as part of Mercy Health Partners,” Jewish Health System Chairman Robert Kanter said in the release. “Being part of the Mercy system will make both Jewish Hospital and Mercy stronger, more robust, and better able to serve our patients, and will allow Jewish to expand its role in the region’s
healthcare network.”
Meanwhile, Fort Hamilton’s decision to affiliate with Kettering Health Network “strengthens Fort Hamilton’s ability to maintain the latest in medical and surgical health care for the Hamilton and Butler County,” said Bob Weigel, Fort Hamilton Hospital and Healthcare Corp. chairman.
