A November merger announcement by the only acute-care hospitals in Massillon, Ohio, took an odd turn earlier this month when the hospitals' owners, Akron (Ohio) General Health System and Plano, Texas-based Triad Hospitals, sued the city, a healthcare foundation and the state attorney general seeking a ruling that the plan would not violate a 100-year-old property deed.
Late last year, not-for-profit Akron General announced it would merge 158-bed Massillon Community Hospital with for-profit Triad's 125-bed Doctors Hospital of Stark County to create a joint venture. But first, Massillon Community had to settle questions on its land charter dating back a century.
While no one has challenged the deal, in a 15-page lawsuit filed in Stark County Court of Common Pleas, the systems sued the city of Massillon, the Ohio attorney general and the Community Health Foundation to secure a binding judgment and pre-empt any future legal challenges. The hospitals are not seeking financial damages. And the defendants, who Massillon Community spokeswoman Susan Koosh said have done no wrong, are only considered interested parties. The foundation was formed when three-hospital Akron General purchased Massillon Community and has some contractual approval rights over the hospital. The attorney general, who oversees charitable trusts, must approve the merger.
That approval is not a given. In 1997, then-Ohio Attorney General Betty Montgomery threatened to challenge Massillon Community's proposed sale to Columbia/HCA Healthcare Corp., now HCA, finding an "appearance of impropriety" in the company's hiring of Massillon's former board chairman, Jerry Bowman, as the human resources director of its Ohio division. That merger was scuttled.
Daniel Cunningham, senior vice president of legal affairs at Akron General, said there's nothing exotic about the suit. "Often parties trying to interpret an old deed will ask a court to give a definition reflecting modern needs and conditions," he said. "In this case, we're trying to show that the merger would not violate the deed's intent, which is keeping a hospital open in Massillon."
At issue is a 1904 deed donating four acres to establish a hospital in Massillon. Previous court rulings interpreted restrictions on the deed as limiting hospital ownership to a not-for-profit organization. The current proposed deal would ultimately result in both hospitals being owned by a for-profit company jointly controlled by Triad and Akron General.
In a joint statement, Massillon Community President Michael Reichfield and Doctors Chief Executive Officer Janie Sinacore-Jaberg said they believe the joint venture won't violate the deed because it will have a "significant nonprofit component through the ownership and participation in governance by Akron General Health System and/or Massillon Community Hospital. We also believe that this venture is in keeping with the original intent of the deed, which was to provide quality healthcare in the local community."