Baptist Health announced Monday it has signed a letter of intent to acquire and operate Hardin Memorial Health.
The letter of intent is a non-binding agreement, which follows a two-year long HMH process of exploring potential affiliations and authorizes both parties to move forward with necessary steps to pursue a proposed acquisition. Terms of the letter are confidential, according to a news release. Following due diligence and the negotiation process, projected to take several months, the terms of the final agreement will be made public, according to the release.
The HMH Board of Trustees voted in August to sign the letter with Louisville-based Baptist Health as its future partner, subject to due diligence, the negotiation of definitive transaction documents and appropriate regulatory approvals.
The parties are familiar with each other. For the past 20 years through a series of agreements, Baptist Health has provided management services for the county-owned hospital and its health system.
Hardin County Judge-Executive and Chairman of the HMH Board of Trustees Harry Berry said the challenge for independent, county-owned hospitals such as HMH, faced with a demanding and uncertain environment of increased costs and declining reimbursements, is to continue to ensure that clinical expertise and capital investment keep pace with local demands for the highest level of health care.
“HMH and Baptist Health have worked together for two decades. This transaction will assure HMH will emerge stronger operationally and financially as a regional health care leader,” he said in the news release. “This will clearly benefit the 400,000 individuals in 10 counties which our health system has served with quality health care for more than 60 years.”
HMH operates more than 45 outpatient facilities, including a Cancer Care Center and Outpatient Surgical Center, in its 10-county area. Since 1997, it has been managed by Baptist Health.
The 300-bed hospital in Elizabethtown includes 270 acute-care, 15 psychiatric and 15 skilled-nursing beds. Additionally, HMH is the third largest employer in Hardin County with 2,389 employees and a volunteer corps of 119.
Allen Rudd, chairman of the Baptist Health Board of Directors, said the board is pleased at the prospect of welcoming Hardin Memorial Health to the Baptist Health family.
“We are committed to expanding HMH services, growing its market share and enhancing its position as our anchor facility for Central Kentucky,” Rudd said in the release. “The missions of Baptist Health and HMH are closely aligned and we look forward to continuing to provide high-quality healthcare to Central Kentucky residents.”
Janice Norton, vice president and chief legal counsel at Baptist Health, said they are committed to keeping the current staff, including upper management. She said they have done a great job running the hospital.
“We would like to keep the whole senior team in tack and hire all current employees,” Norton said.
Berry said it is the responsibility of the board of trustees to ensure HMH remains strong and continues to achieve its mission of improving clinical quality, enhancing patient access, managing population health and helping sustain long-term viability so residents can count on the highest quality of local health care for many years to come.
According to the release, 18 due diligence teams will cover operational, legal and financial areas.
“That due diligence process takes a long time and it is a very thorough process and it literally takes months to go through,” said Dennis Johnson, HMH CEO.