Duke Health, LifePoint Form Community Hospital Joint Venture

John Commins, February 1, 2011

Duke University Health System, Inc. and LifePoint Hospitals have partnered to create "flexible affiliation options" that will range from joint ventures to outright ownership of community hospitals in North Carolina, the two healthcare providers have announced.
The joint venture -- DLP Healthcare, LLC -- combines Brentwood, TN-based LifePoint's financial resources and experience managing community-based hospitals with Durham, NC-based Duke's development of clinical services and quality measures. The partnership is one of the first between an academic health system and a for-profit hospital company, Duke/LifePoint said.

"This is a challenging time for many community hospitals as the healthcare environment undergoes significant change and costs continue to rise," said William F. Carpenter III, chairman/CEO of LifePoint Hospitals. "Duke/LifePoint has the ability to help hospitals not only weather the months and years ahead, but also prosper and offer their communities even better care."

Maria Parham Medical Center, a private, non-profit, hospital in Henderson, NC, this week signed a nonbinding memorandum of understanding that would make it the first hospital in the new network. Under the partnership, MPMC would retain 20% ownership and Duke/LifePoint would have 80% ownership, but governance would be shared 50/50, "giving the community an equal and long-term voice in the strategic direction of the hospital," MPMS said.

MPMC assets and the proceeds from the transaction would eliminate MPMC's debt, and the remaining assets -- approximately $30 million -- would create a locally governed charitable foundation to fund new programs and services in the service area, which includes north central North Carolina and southern Virginia.

"For the last year, MPMC has explored the possibilities of a partnership or affiliation that would allow us to strengthen our hospital," said W. Beverly Tucker, MD, chairman of the MPMC board, and family physician. "After lengthy consideration, the MPMC board unanimously determined that a partnership with Duke/LifePoint has the potential to bring a powerhouse of clinical and operational resources that could enhance our ability to grow and provide more services to patients."

John Commins

John Commins is a senior editor at HealthLeaders Media.

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