The potential sale means CHP would be exiting the Tennessee market. The announcement came on the same day that CHP completed the $150 million sale of Mercy Health Partners of Northeast Pennsylvania in Scranton to Community Health Systems in Franklin, Tenn.
Once the sale of Mercy Health Partners is completed, CHP will still own hospitals in Kentucky and Ohio.
Naples, Fla.-based HMA already owns four hospitals and a surgical center near Nashville. The for-profit company operates 60 hospitals in 15 states, including Alabama, Florida, Texas, Washington and West Virginia.
Last week, Jeffrey A. Ashin, president and CEO of Mercy Health Partners in Tennessee, told employees via an in-house publication that the name of a prospective purchaser would not be announced until Fall. On Monday, however, in a memo to employees and physicians posted on MHP's web site, Ashin announced the move by the health system's board.
According to the memo, the board selected HMA after considering several proposals from unnamed healthcare organizations. HMA's "consistent track record of transforming underutilized hospitals into profitable and superior medical centers" was listed among the reasons for its selection.
In the memo, Ashin said that the name of the health system is expected to change. He said the health system would no longer have an official Catholic affiliation, but that HMA has asked the Sisters of Mercy to continue to serve at the hospital and that despite the acquisition by a for-profit company, the health system would continue to follow its charity care policies.
Ashin's memo did not address any potential management or personnel changes.
The announcement ends several months of speculation regarding new ownership of the Knoxville-area hospitals. In November 2010, then CEO David Jimenez announced his pending retirement and revealed that discussions with the University of Tennessee Medical Center in Knoxville had ended without an agreement. At that time Jimenez said a request for proposal would be issued to other perspective point venture partners.
In the same announcement, Jimenez said the health system's services were being reimbursed at tens of millions of dollars less per year than the system received in 2007 and added that "without an infusion of additional capital we will not be able to make needed investments and, at the same time, pay off our debt."
MHP-Tennessee was formed by the merger of CHP-owned St. Mary's Health System and Baptist Health System of East Tennessee in 2008. In June 2010, the MHP board announced that it was considering the sale of the Mercy Medical Center West campus. At that time, the board said in a statement, that although "Mercy has a strategic plan for the development of the West campus, the board action reflects the realities related to healthcare reform and acknowledges the need to balance the capital needs of continued development at Mercy West with the needs of other Mercy facilities."
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Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
