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Mercy buyer announced


Mercy Health Partners announced Monday, May 2, that it was pursuing “exclusive negotiations” regarding purchase of the Mercy system — which includes Farragut’s Mercy West Hospital — with Health Management Associates, based out of Florida.

“The final decision was an extremely difficult one in that we received outstanding proposals from many excellent healthcare organizations and we are grateful to all who expressed an interest in our ministry,” Mercy CEO Jeff Ashin said in a memo sent to Mercy staff and doctors.

“Much work remains to be done over the coming months, including: on-going due diligence; the negotiation of an asset purchase agreement; review and approval by CHP, our parent corporation; and, regulatory and canonical approvals. Nevertheless, we hope to formally complete the transaction by the fall of this year,” Ashin said.

In late April, Mercy had said it likely would not announce the purchaser until the end of the year, but Ashin said the secrecy was becoming a stressor to employees.

“Over the past week, I have sensed from conversations with many of our leaders, physicians and associates that the continued ambiguity surrounding the identity of our new owner has become a source of significant stress and distraction,” he said.


Health Management Associates is a for-profit operator of hospitals throughout the south.

“The company has a consistent track record of transforming underutilized hospitals into profitable and superior medical centers,” Ashin said.

Ashin said the hospitals in the Mercy system likely all will face name changes, and the system will no longer have any direct affiliation with the Catholic Church or Sisters of Mercy.

But, “our staff and our communities will see little to no change in our hospitals as a result of the change in our tax-paying status,” Ashin said.

“The same high quality patient care will continue to be delivered by the same high quality staff. For-profit and not-for-profit hospitals are overseen by the same regulatory agencies and must abide by the same local and federal requirements.”

Ashin said the hospitals would not offer abortions or direct euthanasia after the change.

“Our hospital associates, physicians and patients will soon benefit from being a part of a larger hospital network and strong financial partner,” Ashin said.

In June of last year, Mercy announced it had plans to sell Mercy West. In August, Mercy said it was conducting talks with The University of Tennessee Medical Center as a possible partner in healthcare services, but by November those talks had fallen through.

That same month, then-CEO David Jimenez wrote a memo to Mercy employees detailing the hospital system’s plans to issue a Request for Proposals for other potential joint venture partners or buyers.

He said the sale would affect the entire system, not just Mercy West.

By April 2011, Mercy had narrowed the RFP field to two potential buyers.

 

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