HANCOCK - A process which began almost two years ago has been finalized, and now a joint venture between Portage Health and for-profit Tennessee-based LifePoint Hospitals is in effect.
In January 2012, President and CEO Jim Bogan and the Portage Health Board of Directors began the process to find another health care system to partner with to help with capital improvements and provide financial support needed for the changes, which would be brought about by the implementation of the federal Affordable Care Act. Also, the hospital was financially sound at the time and could negotiate from a position of strength. Eventually, four systems were chosen as possible partners. That was trimmed to two candidates, and finally LifePoint was chosen as the best fit for Portage Health.
In an interview this morning, Bogan said he's very pleased the joint venture with LifePoint is completed.
Kurt Hauglie/Daily Mining Gazette
A joint venture between Portage Health and Tennessee-based LifePoint Hospitals has been finalized. Ownership of Portage Health is now 80 percent LifePoint and 20 percent Portage Health, but governance will be 50/50.
"This is a happy day," he said.
The joint venture had to be approved by the office of Michigan Attorney General Bill Schuette, and Bogan said that was done Nov. 27.
Bogan said the joint venture is going to benefit not only Portage Health, but the community it serves as well.
"It's going to provide the opportunity to excel and make even better the services we offer the community," he said.
With the partnership with LifePoint, Bogan said Portage Health will be able to recruit more physicians and expand care, particularly in urology, cardiology and behavioral health, which will be a new service for the health care system.
The agreement includes $60 million in capital investments from LifePoint and Portage Health over the next 10 years. LifePoint will provide $48 million, and Portage Health will provide $12 million.
There will also be another $40 million investment in a new, locally-governed charitable foundation, which Bogan said will replace the Portage Health Foundation. Its board members have been seated, and its effects will be felt immediately. The Foundation will hold the hospital's 20 percent interest in the joint venture, it will be involved with assuring compliance with the agreement and it will accept contributions and distribution of earnings to support the community needs.
Bogan said LifePoint was chosen in part because its ideals are the same as those held by Portage Health, including a commitment to preserve jobs, dedication to a collaborative relationship with the medical staff, dedication to quality of care and service to patients and the importance of local governance. Although the partnership is 80/20, governance will be 50/50.
LifePoint will eliminate Portage Health's long-term debt, also, Bogan said.
LifePoint Hospitals operates 60 hospital campuses in 20 states. The company headquarters is in Brentwood, Tenn. Its website is LifePointHospitals.com.
Other than banners announceing the change at the various Portage Health sites in Hancock, Houghton and Lake Linden, Bogan said there will be no physical change to any of the buildings.
"Business will continue to be Portage Health," he said.