Sacred Heart Health System, Pensacola, Fla., has formed a joint venture with LHP Hospital Group, Plano, Texas, that will lease and operate Bay Medical Center and relieve it of its debt obligations.
LHP, Sacred Heart form joint venture
The $154 million agreement includes a 40-year lease and asset purchase agreement, according to information on Bay Medical's website. The deal will allow the 286-bed Panama City, Fla., hospital to retire all of its $115 million debt and still follow its charity care policy, according to an e-mailed news release.
Sacred Heart and LHP will have equal representation on the joint venture's governing board, and day-to-day operations of the hospital will be overseen by a board of trustees composed of physicians and community leaders.
“This agreement is providing the best possible solution to aid Bay Medical financially, while still allowing us to provide the necessary charity care to the community and preserving our roots as our community's hospital,” Steven Johnson, Bay Medical president and CEO, said in a statement. “Along with the clinical integration of hospitals from Port St. Joe to Pensacola, the increased purchasing power that comes with doing business as a network will provide substantial savings that can only enhance all that we offer.”
Johnson added in the statement that the hospital's first priority under the joint venture will be to make improvements in the emergency department and to work with physicians to create a strategic business plan.
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