Duke LifePoint has finalized the terms of a deal that will allow it to expand into Pennsylvania, its first market in the mid-Atlantic region.
The joint venture between Duke University Health System and publicly traded LifePoint Hospitals
expects to close its acquisition of Conemaugh Health System
, 70 miles east of Pittsburgh in Johnstown, Pa., by Sept. 1. The transaction, announced in March, includes Conemaugh's three hospitals, outpatient centers and physician groups.
Duke LifePoint is in the midst of a nationwide expansion strategy
, which has already taken it into Michigan's Upper Peninsula. It also owns seven hospitals in its home state
of North Carolina and one in Virginia.
The financial terms of the Conemaugh deal exceed $500 million, including a commitment to invest $425 million into Conemaugh's services and facilities over the next 10 years. Duke LifePoint also will fund a charitable foundation that will sponsor community programs.
Conemaugh's financial report for fiscal 2014 showed the system is operating with a slim operating margin of 1.5%
and has cut costs to counter declining patient volume.
Under the agreement, Duke LifePoint will retain all of Conemaugh's current employees and establish a local board of trustees comprising community members, local physicians and a representative from Duke.Follow Beth Kutscher on Twitter: @MHbkutscher