Portage Health announced earlier this year that they were negotiating with LifePoint Hospitals on a merger between the two health care systems.
A definitive agreement has now been reached that will give LifePoint 80% of a new joint venture, with Portage Health retaining a 20% stake.
The health system will be governed jointly by a board of four Portage Health representatives and four from LifePoint.
President and CEO of Portage Health Jim Bogan said, “It was important to our affiliation committee that we ensure the governing body has certain rights and responsibilities that only they hold; and they have responsibility for about 30 different areas of responsibility. Some of the more typical ones, you would expect would be like approval of the operating budget and the capital expenditure budget each year, responsible for expansion of clinical services; also if there was any decreases in clinical services, that would also be a responsibility for the governing body to address.”
The agreement includes $60 million in capital investments over the next 10 years and an additional $40 million to be used to create a community charitable foundation.
The infusion of capital will allow Portage Health to expand and enhance its services.
Bogan explained, “We will be, early on, looking at our physical facility here on our campus and determining what other needs we might have as we go forward; along with it, a real heavy emphasis on recruitment and retention of physicians.”
Other than the improvements, Portage Health will operate as usual, including the name.
“LifePoint is not an organization that’s big on changing signage and the expectation of what you want to have here, that is a local decision on our part,” Bogan said. “We are looking at going forward as Portage Health—that will be the name of our hospital and also we want to keep the good reputation of Portage Health in play. Our employees are a great group of people; our employees will have jobs going forward. One hundred percent of the people on close date will be having jobs going forward unless they don’t pass the screening exams, drug testing, et cetera.”
The definitive agreement is still subject to the approval of Michigan’s Attorney General.
A public hearing is expected to take place on September 23rd. The closing date could come as soon as November 30th.