Officials with Bolivar-based Citizens Memorial Hospital and CoxHealth in Springfield have signed a letter of intent to merge the two, making CMH a part of Cox.
The announcement came in a joint press release Friday morning.
It describes a due diligence period during which both entities will explore the details of one another’s business practices before reaching a final agreement. That could come as soon as mid-2017.
“After a great deal of consideration, we feel that forming a partnership with CoxHealth is in the best interest of CMH’s future,” Donald Babb, chief executive officer/executive director of CMH, said in a news release. “This is a strategic partnership that will expand CMH’s mission and values and further our ability to make a difference in our local communities.”
The release states that CoxHealth will invest $50 million for CMH. $40 million will be paid to the hospital and $10 million to an independent charitable foundation. Of that amount, it can be used as follows, according to the letter of intent summary:
- $6 million can be used by the independent charitable foundation in its discretion, subject to certain restrictions, including setting aside $1 million for medical student, nursing and allied health scholarships for residents of the CMH service area and employees and children of CMH employees.
- The remaining $4 million (of the $10 million) is restricted for CMH operations and to reimburse CoxHealth for up to $1 million of pre-closing CMH liabilities, if any.
It went on to state that upon final approval, CoxHealth will commit $70 million over a seven-year period for strategic capital projects and routine needs.
Under the letter of intent, CMH will continue to provide current service lines and facilities and both entities will collaborate regarding new services. The Bolivar-based system will retain its board - with designated seats for CoxHealth representatives - and keep its current employees, who will retain their existing pay and benefits. Additionally, CMH will keep its name in a co-branded format with CoxHealth.
Citizens Memorial Hospital/Citizens Memorial Health Care Foundation is an integrated health system that serves citizens in eight southwest Missouri counties. It employs nearly 2,000 employees and 91 medical providers, and has 360 volunteers. Facilities include Citizens Memorial Hospital, Ellett Memorial Hospital in Appleton City, 32 primary and specialty care clinics and over a dozen other care facilities.
It will join the 10,800-employee plus CoxHealth system, which serves more than 900,000 people in a 24-county service area in southwest Missouri and northwest Arkansas.
“One of CoxHealth’s key goals is to strategically expand our footprint to serve our communities by exploring collaborative relationships with other health systems,” says Steve Edwards, president and CEO of CoxHealth. “We are honored to join with an organization with such an excellent reputation and one that has made such a profound impact in the community it has served for more than 34 years.”
In an accompanying document, the Springfield-based hospital system says it believes the partnership will help create a new model of health care. It says with the “Affordable Care Act and other financial challenges, we can work together to reshape health care, creating a greater focus on prevention, screening, wellness and chronic care management.”
It mentions more than 50 hospitals in Missouri are considered vulnerable to closure due to financial risk, mainly in rural areas, citing data from the Missouri Hospital Association.
“While CMH financially is strong, this relationship further strengthens and secures our united future.”
CoxHealth most recently acquired Skaggs Regional Medical Center in 2013 to form Cox Medical Center Branson. The merger in part has led to a $30 million renovation emergency department and critical care unit expansion, which was completed in 2014.