Health Management Associates last week said it agreed to acquire the two hospitals in Jackson, Miss., operated by Memphis, Tenn.-based Methodist Health Systems.
The purchase of assets also includes three Methodist-owned physician clinics in Mississippi and Methodist's 50% share of Health Choice of Mississippi, an HMO. The other 50% share is owned by physicians on the health plan's provider panel.
Methodist's Jackson operation includes a main campus leased nine years ago from Hinds County and a satellite facility opened in 1996 on the north side of the city.
Terms of the transaction won't be announced until the deal is completed, which will occur after regulatory approval is granted, said Maurice Elliott, Methodist's president. He said the price will reflect the system's capital investments of $100 million in the Mississippi market during the past nine years.
The deal gives Naples, Fla.-based HMA nine hospitals in Mississippi, including five of the nine acute-care, nongovernmental facilities in Jackson and two adjacent counties.
No antitrust problems are likely, given competition from three large medical centers in Jackson, all with a larger market share than Methodist's, Elliott said.
Methodist's inability to increase market share, despite a strategy that included a $35 million addition to the main campus and construction of the $30 million satellite, led to the decision to sell the Jackson assets, he said. Methodist retains one Mississippi hospital, in Lexington; it operates six hospitals in Tennessee.
HMA plans to make the 319-bed Methodist complex the tertiary facility for all its Mississippi hospitals.
One lingering issue is a state Supreme Court ruling issued last October that concluded the north Jackson satellite facility should not have received a certificate of need for construction in 1994. Methodist has appealed the ruling, and the deal is not contingent on the CON approval, Elliott said.