RAVENNA: Robinson Memorial Hospital has reached a tentative deal with University Hospitals to join the Cleveland-based health system.
The hospital, in Ravenna, had been in talks with several health systems as it searched for a larger partner to ensure its long-term survival.
The boards from University Hospitals and Robinson approved a letter of intent this week for UH to acquire the community hospital, the hospitals’ leaders announced Wednesday. Financial and other terms of the deal are being negotiated.
A deal is expected to be finalized by the end of May.
Robinson opted to pursue a deal with UH because of the health system’s track record of running successful community hospitals throughout the region, Robinson President and Chief Executive Officer Stephen Colecchi said.
“They are clearly one of the leading health systems in the country,” he said.
By joining the health system, Robinson will be able to bring UH’s respected specialty services to Portage County, UH Chief Executive Officer Thomas F. Zenty III said.
“We want to bring world-class care as close to the communities that we serve as possible,” he said.
A deal with UH should help boost Robinson’s physician recruitment, capital needs, technology investments and operational efficiencies, Colecchi said.
“The expectation is there will be capital investments that will result in improvements in programs and services,” he said.
The 117-bed hospital has been struggling financially, posting a $10.2 million operational loss for the first 11 months of 2013, according to a recent report by Moody’s Investors Service. It has more than 1,300 employees.
The rating firm recently downgraded Robinson’s creditworthiness, citing the operational loss, decreasing revenues, a 15 percent decline in admissions last year and increasing competition from University Hospitals and the Cleveland Clinic.
Robinson had an affiliation since 2007 with Summa Health System that expired at the end of 2013.
“Robinson’s affiliation with Summa for the past seven years has been very positive and has resulted in many benefits to both organizations,” Colecchi said. “We did have the opportunity to discuss a continuing relationship with Summa, and the board of directors seriously considered that option. Ultimately, the board of directors determined the proposal from University Hospitals was the best proposal to insure the future of Robinson as a full-service community hospital with enhanced programs and services.”
Colecchi said some contractual and other relationships it has with Summa apart from the previous affiliation agreement will continue.
Summa spokesman Mike Bernstein confirmed “the two organizations had positive dialogue but did not reach a new agreement that would satisfy the goals of both organizations.
“We enjoyed a successful relationship with Robinson, and we wish their board members, leadership team and employees well in their future endeavors,” he said.
On Jan. 1, Robinson officially converted from county-owned to not-for-profit status, opening the door for the community hospital to pursue new partnership opportunities with other health systems.
Under the terms of the conversion, a nonprofit called Robinson Health System is paying Portage County $50,000 annually to lease the Ravenna property and facility, which continues to be county-owned. The health system is responsible for running the hospital and maintaining the county-owned buildings.
UH is in negotiations to become the “sole member” of Robinson Health System, which would continue to lease the property and facility from the county to run the hospital.
UH has been expanding aggressively throughout Northeast Ohio.
At the beginning of the year, the health system completed an acquisition of Parma Community General Hospital and EMH Healthcare in Lorain County.
In the Akron area, UH this week announced plans to open a 35,000-square-foot outpatient medical facility with an urgent care center in Fairlawn by the end of the summer.
The move came after the health system acquired several physicians’ practices in the Akron area, increasing its number of primary-care doctors in the West Akron/Montrose area to about 25.
UH has 14 owned or affiliated hospitals throughout Northeast Ohio, including the flagship UH Case Medical Center in Cleveland. UH has about 25,000 employees, making it Northeast Ohio’s second largest employer, behind the Cleveland Clinic.
The tentative deal between UH and Robinson is the latest in a series of hospital partnerships and acquisitions throughout the region in recent months.
Summa recently finalized a $250 million deal with HealthSpan Partners, an auxiliary of Cincinnati-based Catholic Health Partners, for a minority ownership stake in its health system.
Akron General Health System also is seeking a partnership deal after plans to be acquired in a joint venture between a Tennessee-based for-profit hospital chain and the Cleveland Clinic recently fell through.
Cheryl Powell can be reached at 330-996-3902 or email@example.com. Follow Powell on Twitter at twitter.com/abjcherylpowell.