Wednesday, September 17, 2014NEW CASTLE, Pa. -- Early 2015 is the anticipated timeframe for completing Jameson Health System’s merger with the University of Pittsburgh Medical Center, says Steve Warner, chairman of Jthe ameson board of directors.
The letter of intent announced Tuesday (READ STORY) begins the due diligence process, which is expected to take 60 to 90 days, leading to a definitive agreement both Jameson’s and UPMC’s boards would have to approve, he said.
“Since early on in all of our discussions, it’s been clear everyone wants to move as quickly as possible,” Warner said on a conference call Tuesday afternoon. “We’re looking at the first quarter of 2015 as the time to close the transaction.”
The process of exploring an affiliation began about three years ago, driven by how “outside influences” including the Affordable Care Act and declining reimbursements were affecting Jameson, Warner reported. Those changes “began to make it pretty clear that we needed to at least affiliate with a larger partner that had some resources that could help our region deliver the appropriate care here,” he said.
Jameson explored potential partnerships and affiliations with Community Health Systems Inc. in Franklin, Tenn., which earlier this year acquired Sharon Regional Health System in Sharon and operates ValleyCare Health System of Ohio in Mahoning and Trumbull counties in Ohio, as well Pittsburgh’s Allegheny Health Network and Highmark Inc., Warner said.
“Ultimately we decided that the culture fit was the best to continue on with a nonprofit,” he said.
UPMC, based in Pittsburgh and affiliated with the University of Pittsburgh Schools of the Health Sciences, is ranked 12th in the U.S. News & World Report annual Honor Roll of America’s Best Hospitals and is ranked first in Pennsylvania. It is consists of more than 20 hospitals and 400 doctors’ offices and outpatient sites, and is the largest nongovernmental employer in the state with more than 62,000 employees. Jameson is a nonprofit health-care system based in Lawrence County with one hospital, 25 care facilities, 250 physicians and more than 1,300 employees overall.
UPMC Horizon, a UPMC affiliate with campuses in Greenville and the Shenango Valley, had collaborated with Jameson in a number of areas over the years, including cancer and emergency services, and has “a good relationship” with Jameson, said Don Owrey, UPMC Horizon’s president.
“It makes a lot of sense for us to create some synergy to better meet the health needs of the Mercer-Lawrence [county] region,” he added.
According to the merger announcement, UPMC plans to “commit to no less than 10 years of planned service improvements for the region” and to spend $70 million on “development of facilities and services” at Jameson, including a minimum of $15 million over the next two years.
Already identified priorities for improvements include establishing a hospice program that Jameson’s medical community has requested, said Doug Danko, Jameson CEO, and opportunities will be evaluated for improvements and expansions to programs such as cardiac intervention and vascular intervention. Studies will be undertaken to examine physician manpower needs, demographics and capital improvements.
A master facilities document will be formulated to “make sure over the next 10 years that we build programs in the right locations through the entire region,” Danko said. “Overall I think that our board and UPMC representatives were very wise at trying not to prematurely determine where program development should occur or where relationships should evolve.”
RELATED:
Breaking: Jameson Health System to Merge with UPMC
Copyright 2014 The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our twice-monthly print edition and to our free daily email headlines.