Ardent Health Services is running into a physician roadblock that threatens to scuttle its attempt to purchase three-hospital Carraway Methodist Health Systems, Birmingham, Ala.
Nashville-based Ardent and not-for-profit Carraway failed to meet their target of Feb. 28 to complete the purchase, which was announced in January and valued at $150 million or more by those familiar with the sale. If the sale goes through, privately held Ardent plans to sell two smaller, rural hospitals that are part of the deal, 99-bed Carraway Burdick West Medical Center, Haleyville, Ala., and 56-bed Carraway Northwest Medical Center, Winfield, Ala.
Ardent's letter of intent to buy the Carraway system is contingent on Ardent's ability to negotiate a long-term lease agreement with the Norwood Clinic, a 70-physician multispecialty practice with offices on the campus of the flagship 363-bed Carraway Methodist Medical Center, Birmingham, according to Carraway officials.
Ardent is seeking a commitment from the Norwood physicians because the clinic is building a new office across town from Carraway and Norwood's lease at Carraway ends in 2004. The $56 million clinic building is scheduled to open next year across the street from the $225 million, 219-bed "digital hospital" that rehabilitation giant HealthSouth, based in Birmingham, is building (April 2, 2001, p. 28).
In a printed bulletin to employees, Carraway officials said they have taken over the negotiations with Norwood. Ken Eshak, interim chief operating officer of the Carraway system, said in the bulletin that Norwood physicians account for almost 60% of Carraway Methodist's revenue, so it's no surprise that Ardent wants a guaranteed commitment from the doctors.
When asked if Ardent still expected the deal to close, company spokesman David Jarrard would only say the company still "remains very hopeful" it can complete the acquisition. Ardent and Carraway have not signed a definitive agreement for the transaction, he said.