Baptist Health System, the largest hospital network in Alabama, won't look much different if it makes a deal to sell its facilities or forge some type of a partnership with for-profit Triad Hospitals, officials said.
The board of trustees of the Birmingham-based system voted to pursue a "relationship" with Triad in an effort to generate much-needed cash for tens of millions of dollars in renovations and technology. Trustees insisted, however, a deal would not alter or compromise the system's 81-year religious ministry and charitable mission.
"The board is absolutely committed to prerogatives that will ensure that (the hospitals) can maintain the faith-based nature of healthcare in our institutions," said Dennis Hall, Baptist's president and chief executive officer.
Triad, which typically purchases hospitals in small cities, has agreed to continue Baptist's faith-based mission and ministry by maintaining the system's policy prohibiting abortions, continuing its chaplain program and providing the same level of charity and indigent care.
Baptist, which operates 10 hospitals in Ala-bama, has been seeking either a buyer or a partnership since earlier this year as a way to help fund capital projects. Though the system is expected to earn as much as $8 million this year, Hall said, Baptist can't fund about $70 million in annual capital costs.
Neither Baptist nor Triad, Plano, Texas, would discuss specifics of the deal. Triad owns or operates 49 hospitals, including five in Alabama. It's not certain whether the deal will be an outright sale or some form of a partnership. But a letter of intent could be signed within 30 days, said Hall, who expects it would then take a "few months" to hammer out a definitive agreement.
"The exact shape and form of (the relationship with Triad) is a work in progress," said Bobby Keith, the chairman of Baptist's board of trustees.
All of Baptist's estimated 9,000 employees are expected to keep their jobs. That may not hold true for corporate employees and top leadership, including Hall, who said, "I certainly have no expectations to continue here as chief executive" once the deal is completed.
The board, which reportedly also considered Health Management Associates, a Naples, Fla.-based for-profit with 39 hospitals, approved the deal despite protests from many doctors who questioned the need to sell Baptist to an investor-owned company. Hall, whose management decisions have been questioned by some critical doctors, said he believes the system is worth about $700 million.
Patricia Ball, a Triad spokeswoman, said the company was "honored to have been selected" but declined further comment until a letter of intent is signed. By adding as many as nine hospitals to the five it now operates in the state, Triad is likely to improve its negotiating position with the dominant insurer, Alabama Blue Cross and Blue Shield, said Robert Mains, a stock analyst with Advest, a Hartford, Conn.-based financial services firm.
"It won't hurt to add a little heft," he said.
Four Baptist hospitals can opt out of the deal. A fifth hospital, 115-bed Cullman (Ala.) Regional Medical Center, will not be part of the deal because Baptist controls just a 50% stake.