Buyer to invest $20 million over three years, will offer employment to substantially all employees, and assume all health plan contracts.
Dignity Health today signed an asset purchase agreement with Prime Healthcare Services for the sale of Saint Mary’s Regional Medical Center. The sale ensures that the hospital will remain open, offering all current acute and emergency care services to the Reno community. Saint Mary’s sponsoring congregation, the Dominican Sisters of San Rafael, has approved the transaction, which is expected to be finalized by June 30.
As a condition of the sale, Prime Healthcare Services has committed to the following:
- Maintain current service line operations, including the emergency department.
- Offer employment to substantially all of the hospital’s 1,600 employees.
- Invest $20 million in capital in the hospital over the next three years.
- Continue the hospital’s commitment to the community by maintaining the current
charity care policy.
- Assume health plan contracts, including with Saint Mary’s Health Plans.
“We are pleased that Saint Mary’s will continue offering its high level of care and provide competition for health care services in the Reno area,” said Michael Blaszyk, senior executive vice president and chief financial officer for Dignity Health. “We appreciate the community’s support for keeping the hospital open and preserving much-needed jobs for the local economy.”
Since 2008, Dignity Health has invested $67 million in Saint Mary’s, which has significantly strengthened the facility’s ability to sustain its mission. However, the hospital continues to experience significant challenges brought on by an ailing local economy and insufficient reimbursements. In 2011, the hospital posted a net loss of $43.5 million.
In recognition of the fact that the hospital requires new capital to strengthen and grow its services, a search for a new partner has been underway for nearly 24 months. The primary objective of this search has always been to ensure the viability and future of the hospital. The alternative to this sale – closure – was deemed unacceptable by both Dignity Health’s Board of Directors and the Dominican Sisters of San Rafael.
“The Dominican Sisters of San Rafael have served in Reno for more than 100 years, and we are committed to the health and well-being of all who live and work here,” said Sr. Maureen McInerney, Prioress General of the Dominican Sisters of San Rafael. “We love this community and we made this decision in support of the common good in Reno to preserve access to care and jobs.” Prior to her current role with the Dominican Sisters of San Rafael, Sr. Maureen served for seven years at Saint Mary’s Regional Medical Center as the vice president of sponsorship and mission.
Saint Mary’s Medical Group will also transition to Prime Healthcare. Saint Mary’s Health Plans will remain within the Dignity Health network. Prime Healthcare and Saint Mary’s Health Plans have reached an agreement on a contract for services. Dignity Health is also aware how important Saint Mary’s Mission Outreach programs are to the community, and is working to ensure their continued service.
Saint Mary’s Regional Medical Center will continue all normal operations during this transition. There will be no impact on patient care, employment, contracts, billing, or any other facet of Saint Mary’s daily operations during this transition.