MedCenter Hospital in Marion, Ohio, will be converted to an outpatient facility next year under a plan to sell the 86-bed facility to rival Marion General Hospital for $12.4 million.
Earlier this year MedCenter rejected a plan to consolidate with 151-bed Marion General, saying it wanted to preserve consumer choice in the two-hospital town.
But MedCenter's parent, Ohio MedCenter Foundation, failed to complete an alternative deal to sell the hospital to Columbus, Ohio-based Mount Carmel Health System. The $15 million sale fell through when a local physician network, Marion Independent Physicians Association, stood fast in its decision to align with Marion General and Smith Clinic. Mount Carmel had planned to lease MedCenter to a new joint venture if at least 45 of the independent physicians agreed to invest.
"Without the physicians, it was understood that Mount Carmel would back out of any negotiations," said Tracy Whited, MedCenter's interim marketing director.
The purchase realizes a proposal made in 1996 by Smith Clinic, a 56-physician multispecialty group in Marion, and Columbus-based OhioHealth, of which Marion General is a member, to consolidate health services in Marion. In 1996, they called for the clinic to buy MedCenter and convert it to an outpatient facility that would be leased to a joint venture owned by the clinic and Marion General.
Now, Marion General, Smith Clinic and Marion Independent Physicians Association are equal partners in a delivery system called Marion Health System.
Both hospitals are profitable, but Smith Clinic and Marion General have maintained that the community cannot afford the continued rivalry because several hospitals within 30 to 50 miles of Marion compete for patients.
A definitive agreement is expected to be reached in late October. The deal will be subject to various regulatory approvals, including federal antitrust clearance, Marion officials said.