The owners of for-profit Delta Medical Center, Memphis, Tenn., said they have transferred all stock in the 170-bed hospital to a pension plan controlled by employees. The move is one of the first recent examples of a hospital adopting an employee stock-ownership plan, a financing technique used by some for-profit hospital chains about two decades ago. The hospital's chief executive officer, Neil McLean, and his business partner, Craig Watson, purchased Delta in 1999. Under the deal, they sold their holdings to the newly created employee stock-ownership plan, which borrowed money for the purchase from a local bank. Employees working more than 1,000 hours annually are eligible to receive a portion of stock at no charge. McLean, who will continue as CEO, said he and Watson wanted to "show our appreciation" to employees by giving them true ownership of the hospital and allowing them to share in its financial success. McLean declined to divulge financial details of the new ownership structure or specific information about the hospital's fiscal situation, but he said Delta is profitable and generated about $45 million in net revenue in 2005. -- by Michael Romano
Tenn. hospital converts to full employee ownership
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