UP Hospital To Be Sold To For-Profit Company
HANCOCK (WWJ)-- The Portage Health Board of Directors has signed an agreement to form a joint venture with LifePoint Hospitals (Nasdaq:LPNT), a for-profit hospital company based in Brentwood, Tenn.
Portage Health officials say the deal includes $60 million in new capital improvements over the next 10 years.
Said Steve Zutter, chairman of the Portage Health board. "As we have explored this partnership, our board has become even more excited about the benefits that becoming part of LifePoint will bring our communities. This joint venture offers Portage Health opportunities not only to expand and enhance the care we provide, but transform healthcare provided throughout the region."
Under the deal, Portage Health and LifePoint would jointly own and operate Portage Health and its affiliated assets. LifePoint would own 80 percent of the joint venture, while Portage Health would have a 20 percent ownership stake. In addition to the $60 million in capital investments by the joint venture, approximately $40 million would be used to create a locally governed charitable foundation to fund organizations that support crucial community needs.
Said LifePoint chairman and CEO William F. Carpenter III: "We have enjoyed working with the Portage Health team and learning more about the hospital and the important role it plays in the U.P. We are excited at the prospect of becoming part of this community and working with Portage Health to find ways to make the Western Upper Peninsula healthier."
As part of the agreement, governance of Portage Health would be equally shared between Portage Health and LifePoint to ensure that the community has an active and ongoing voice in the strategic direction of the hospital. An eight-member governing board with equal representation from Portage Health and LifePoint would be established.
"This joint venture has exciting potential for Portage Health, our physicians, employees and patients," said Jim Bogan, Portage Health president and CEO. "LifePoint has a strong track record of partnering with hospitals across the nation to improve healthcare in their communities. Through this joint venture, we have great opportunities not only to make Portage Health an even better place to work and receive quality care, but to strengthen and shape the future of healthcare in the Western Upper Peninsula."
The agreement is subject to review by the Attorney General of Michigan before being finalized. Additional information will be placed online at portagehealth.org/lifepoint as it becomes available.
Portage Health owns and operates a 36-bed acute-care hospital and a 60-bed skilled nursing unit and related healthcare services in Hancock, along with nine other locations throughout the Keweenaw Peninsula, each offering a variety of services provided by a full spectrum of healthcare professionals.
Through its subsidiaries, LifePoint operates 57 hospital campuses in 20 states. More at www.LifePointHospitals.com.
