Tennessee-based Community Health Systems Inc. and the Cleveland Clinic have created a joint venture to buy Akron General Health System.
The parties have signed a non-binding letter of intent and entered into exclusive discussions, Akron General announced Aug. 22.
The deal would strengthen Akron General financially while preserving the health system's mission of offering outstanding care for area residents, according to an Akron General spokesman.
"We are thrilled to announce that Akron General Health System has entered into discussions that we believe will lead to a transformative and strategic partnership with two outstanding, nationally renowned healthcare organizations, Community Health Systems and the Cleveland Clinic," said Dr. Thomas L. "Tim" Stover, president and CEO of Akron General Health System.
"The high level of clinical care, operational experience, medical innovation, and best business practices brought together through this potential partnership will serve as a tremendous asset to our community, strengthening Akron General and ensuring our mission of service to the community for generations to come," Stover said.
"We are pleased to announce this affiliation with Akron General Health System. Cleveland Clinic has long-served patients from the Akron area, and this will allow us to expand our clinical services in the region as Community Health Systems grows its presence in the state," said Dr. Toby M. Cosgrove, chief executive officer and president of Cleveland Clinic.
Community Health Systems in Franklin, Tenn. leases or operates more than 130 hospitals in 29 states.
During the exclusive negotiations, the parties will finalize details of the agreement, which will include commitments to:
• Make significant capital investments to improve facilities, technology and hospital services;
• Recruit new physicians to the community;
• Maintain charity care; and
• Appoint a local governing board of trustees consisting of community leaders and members of the hospital's medical staff.
"We are committed to maintaining competition in Northeast Ohio because competition keeps costs down and provides options for our patients," Stover said. "With all the recent changes in health care, we are confident that a strategic affiliation with strong nationally recognized partners is the right direction for Akron General, our employees, patients and the community. Our over-arching goal in all of this is to continue providing exceptional health care."
Stover said the combined strengths of Community Health Systems and the Cleveland Clinic provide unique advantages for Akron General.
"The clinic is committed to developing a model of health care for the 21st century that reduces costs and drives quality to provide the best health care value," he said. "We want to bring that model to our patients and to our community." Through its numerous affiliations locally and nationally, the clinic also understands how to work effectively within a partnership, Stover added. Earlier this year, the clinic announced that it has formed a strategic alliance with Community Health Systems, the other partner in this proposed transaction.
Community Health Systems, Inc. includes 135 affiliated hospitals in 29 states, including four in Ohio. "Community Health Systems is known throughout the country for incorporating best practices in its hospitals," said Stover.
Stover said the next steps include due diligence and final negotiations, a process that may take several months to complete. Assuming the parties consent to the terms of the partnership, a definitive agreement would be expected later this year.