Health Management Associates, Naples, Fla., and Novant Health, Winston-Salem, N.C., said they have restructured their joint venture over seven hospitals in the Carolinas, effective Oct. 1. Last year, HMA sold a 27% interest in the hospitals (Print subscription required) to Novant for $300 million. In the restructuring agreement, HMA received Novant's 27% interest in four of the hospitals, while Novant received an operating contract that gives the not-for-profit system a 99% interest in two of the hospitals, according to a securities filing by HMA. At Lake Norman Regional Medical Center in Mooresville, N.C., Novant has increased its stake to 30%, the filing said. HMA also made a $6.2 million payment to Novant at closing and will make annual payments of $200,000 for the next 10 years, the filing said.
Jim Tobalski, senior vice president of marketing and communications for Novant, said the system had always hoped that its initial passive investment in the hospitals might lead to a more active management role eventually. The two hospitals that it will now operate—Franklin Regional Medical Center in Hartsville, S.C., and Upstate Carolina Medical Center in Gaffney, S.C.—are served by Novant physician practices and, in the case of Franklin Regional, three diagnostic imaging centers in the surrounding regions, Tobalski said.