Duke Health System partners with LifePoint on N.C. hospital network

Duke University Health System has joined forces with LifePoint Hospitals to run a network of community hospitals in North Carolina. Their first is Maria Parham Medical Center in Henderson, North Carolina.

Duke University Health System is teaming up with a Tennessee hospital operator to run hospitals throughout North Carolina.

Durham-based Duke, an academic health system, is working with with hospital operations company LifePoint Hospitals (NASDAQ: LPNT) in a joint venture called DLP Healthcare. The partners say their mission will be to own and operate a system of community hospitals. The first hospital in the DLP Healthcare network will be Maria Parham Medical Center, a private, non-profit hospital in Henderson, N.C. Due diligence on the deal is expected to be completed by April.

“This joint venture will provide community hospitals in North Carolina and the surrounding area with Duke’s outstanding clinical leadership and resources plus the strong financial and operational experience of LifePoint,” William F. Carpenter III, chief executive officer of LifePoint Hospitals said in a prepared statement.

Terms of the proposed Maria Parham deal give some insight about the types of arrangements DLP could be striking with other community hospitals. Maria Parham and DLP Healthcare will share ownership and governance of the hospital. Governance would be shared 50/50 while Maria Parham would retain 20 percent ownership and DLP would own 80 percent.

Specific financial details of the deal were not disclosed but the parties said it would eliminate Maria Parham’s debt and the remaining assets, approximately $30 million, would be used to create a charitable foundation funding new programs and services in the community. As part of a larger hospital system, Maria Parham will gain economies of scale and other capabilities through its connection with DLP.

LifePoint operates 52 hospitals in 17 states and specializes in operating community hospitals. Duke University Health System owns Duke University Hospital, Durham Regional Hospital, Duke Raleigh Hospital and an extensive network of ambulatory facilities throughout North Carolina.