Portage County’s hospital recently received the needed federal approval to switch from county-owned to not-for-profit status, opening the door for potential new partnerships.
The Internal Revenue Service last week approved Robinson Health System Inc.’s application for tax-exempt status.
The IRS decision was a key step needed to convert Robinson Memorial Hospital in Ravenna from county-owned to not-for-profit.
The ownership change is scheduled to be effective Jan. 1, Robinson President and Chief Executive Stephen Colecchi said on Tuesday. The approval originally was expected by July but was delayed by an IRS backlog in reviewing tax-exempt applications.
Colecchi has repeatedly said the conversion is needed to ensure the community hospital’s long-term survival in the changing, competitive local health-care industry.
Robinson is Portage County’s only hospital and among the county’s largest employers, with more than 1,300 workers.
“It is an important step in the history of the hospital and it enables us to have many more partnership options,” Colecchi said.
In Ohio, fewer than 6 percent of all general hospitals are county-owned facilities, according to the Ohio Hospital Association.
When the conversion is finalized, Robinson Health System will own and operate Robinson Memorial Hospital, assuming all hospital liabilities and debts.
The new nonprofit health system will pay Portage County $50,000 annually to lease the Ravenna property and facility, which will continue to be owned by the county, Colecchi said. The health system will be responsible for running the hospital and maintaining the county-owned building.
The transition “will be very seamless for patients,” Colecchi said. “All of our charitable care policies and all the things that directly impact patients will not change.”
The conversion gives Robinson the chance to enter into new deals with other health-care organizations — a trend that’s increasingly common throughout the region and nationwide as hospitals prepare for looming changes from federal health reform.
Robinson has had an affiliation deal since 2007 with Summa Health System that expires at the end of the year. Officials from both organizations have previously said they’re interested in exploring ways they might work together moving forward.
“Given the positive relationship our organizations share, it makes sense that we continue to explore options to work together past the end of our current agreement,” Summa spokesman Mike Bernstein said.
Robinson is continuing to evaluate proposals from an unspecified number of potential partners, Colecchi said. The hospital wants to select a partner by the end of the year and finalize a deal by spring.
Colecchi declined to name the potential partners or release any details, citing confidentiality agreements.
Robinson hasn’t limited its suitors to nonprofit organizations or hospitals only from the region, Colecchi said. A deal could involve a joint venture, affiliation agreement, partial ownership or other arrangement.
“We left the process as open as possible,” Colecchi said. “There is so much transition occurring in health care right now, you really don’t know who all the hospital partners might be. You don’t know who is talking to others in the region. We did leave the process very open to make sure we have the opportunity to receive and review proposals from those health systems that would have an interest in having a presence in Northeast Ohio.”
Summa recently finalized its own $250 million deal with HealthSpan Partners, an auxiliary of Cincinnati-based Catholic Health Partners, for a minority ownership stake in the Akron-area health system.
Akron General Health System also is in talks to be acquired by a partnership between for-profit national hospital chain Community Health Systems of Tennessee and the Cleveland Clinic.
In the coming weeks, Robinson will begin sharing information with employees about the new retirement and benefit plans that will go into effect after the hospital is no longer county-owned, Colecchi said.
Employees will have the option of making the transition to the new retirement plan or staying with the public employees retirement system. They will have to pay into Social Security, even if they opt to continue their public retirement system contributions. New workers will go into the new retirement system.
Cheryl Powell can be reached at 330-996-3902 or email@example.com. Follow Powell on Twitter at twitter.com/abjcherylpowell.