Huntsville (Ala.) Hospital has signed an agreement to purchase Parkway Medical Center, a 120-bed hospital in Decatur, Ala., from Franklin, Tenn.-based Capella Healthcare for $17.5 million. The deal is expected to close before the end of the year and will be effective Jan. 1, 2012, according to a news release issued by both organizations.
Ala. hospital plans to buy facility from Capella
The hospital was one of three Alabama hospitals acquired in March 2008 from Community Health Systems. According to a document Capella filed with the U.S. Securities and Exchange Commission, the Alabama hospitals generated 10.3% of investor-owned Capella's net revenue for the six-month period ending June 30, 2011.
Burr Ingram, spokesman for 803-bed Huntsville, said his organization is not looking to acquire more of Capella's Alabama assets. “Parkway is the only one,” he said.
Ingram also noted that no employee layoffs are expected to be associated with the deal. “There are no plans to cut back services or anything at Parkway,” he said.
Tim McGill who had been serving as CEO for both Parkway and 120-bed Hartselle (Ala.) Medical Center, "has chosen to remain with Capella," said Capella spokeswoman Beth Wright in an e-mail. Effective Jan. 1, he will be CEO at Hartselle full time, Wright said.
According to the release, the hospital employs more than 300 people and its medical staff includes 139 physicians. It was also noted in the release that, starting Jan. 1, Alabama's Morgan County, where Parkway is located, will have the lowest Medicare reimbursement rate in the nation.
“This was a difficult decision, but we feel it will help ensure the stability of high quality hospital care in Decatur for decades to come,” said Capella CEO Dan Slipkovich, who finished 93rd on Modern Healthcare's 2009 list of the 100 Most Influential People in Healthcare, in the release. “Huntsville Hospital has a strong network in this region, including seven hospitals and numerous other facilities, and has a long-established reputation for excellence. They are the best partner for Parkway in today's environment.”
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