WoodBridge Healthcare signs contract to acquire CHS hospitals later this year

WILKES-BARRE — In an acquisition the buyer said will enhance health care services for growing communities of Northeast Pennsylvania, nonprofit WoodBridge Healthcare Inc. announced on Tuesday that the company signed an asset purchase agreement to acquire Commonwealth Health in Northeastern Pennsylvania from subsidiaries of Community Health Systems Inc.

The sale is scheduled to be complete in the fourth quarter this year.

Commonwealth Health consists of three main hospitals — Wilkes-Barre General Hospital, Regional Hospital of Scranton and Moses Taylor Hospital in Scranton. The agreement also includes the acquisition of Commonwealth Health’s ambulatory surgery centers, emergency departments, imaging centers, laboratories, outpatient rehabilitation, sleep care centers, walk-in clinics, wound care centers and physician network.

Ina statement released Tuesday, WoodBridge Healthcare said it “aims to further the system’s mission of meeting the region’s evolving health needs in a compassionate, collaborative and cost-effective manner. WoodBridge will work to enhance community health, partner with local groups to address care gaps, and use hospital resources to provide consistent, tailored care directly to the people who need it. This approach reflects WoodBridge Healthcare’s ‘Mission Project’ — an innovative perspective on healthcare that takes a holistic view of individuals’ social needs as a foundation of good health.”

CHS issues a statement

On its website, Community Health Systems announced the definitive agreement to sell the three Pennsylvania hospitals to WoodBridge Healthcare Inc.:

“Community Health Systems Inc. (NYSE: CYH) announced today that certain subsidiaries of the Company have entered into a definitive agreement to sell three Pennsylvania hospitals — 186-bed Regional Hospital of Scranton; 122-bed Moses Taylor Hospital in Scranton; 369-bed Wilkes-Barre General Hospital in Wilkes-Barre, and certain related businesses to affiliates of WoodBridge Healthcare, Inc. for $120 million, inclusive of a $10 million prepayment for services to be provided pursuant to an information technology transition services agreement and subject to adjustment for the assumption of any capital/finance leases and net working capital.

“The transaction is expected to close in the fourth quarter of this year, subject to customary regulatory approvals and closing conditions.”

Rep. Cartwright offers comment

U.S. Rep. Matt Cartwright, D-Moosic, said he is optimistic that “these important healthcare assets will be saved and hopeful that this new owner will be more accountable to the patients, to the staff, and to the community it serves.”

More on the sale

According to the news release issued by WoodBridge, upon completion of the transaction, the health system will revert to its original nonprofit status.

“Local board representation will continue,” the release stated, adding that WoodBridge Healthcare is committed to preserving access to the high-quality care the community relies on and will ensure the health system builds on the same operations and services it has today.

“We are pleased to announce that these hospitals were a catalyst for establishing WoodBridge, which aims to enhance and preserve access to not-for-profit care in local communities,” said Joshua Nemzoff, Chairman of the WoodBridge Board of Directors. “The Commonwealth Health system has a long and proud history of serving the Scranton and Wilkes-Barre region and we will strengthen and enhance that tradition for years to come.”

The news release stated that WoodBridge Healthcare was launched to help healthcare providers maintain local access to care in a nonprofit setting amidst a changing healthcare landscape. It is believed to be one of the only new companies in the nation that started with the intent of buying hospitals as a nonprofit organization. The company said its leadership is comprised of seasoned, innovative healthcare executives with many decades of combined experience achieving and maintaining clinical quality, community service and financial stability for healthcare organizations nationwide.

WoodBridge said it is committed to enhancing continuity of care and supporting the local workforce. It also said WoodBridge intends to enhance existing services at each facility through a substantial investment in capital, honor current physician relationships and adopt the collective bargaining agreements for unionized employees that are currently in place.

“We know that people and culture are the heart of the system, and that employees and providers have a strong sense of loyalty and commitment when it comes to providing the highest-quality, most personalized care to their friends and neighbors,” said Don Steigman, President of WoodBridge Healthcare. “WoodBridge is dedicated to preserving a supportive, collaborative environment that allows employees, medical staff and the community to continue thriving.”

For the past decade, Mr. Steigman served as the president of Jackson Health, a $7 billion public hospital system in Dade County, Florida.

For the latest information, visit WoodBridgeCaresNEPA.org .

Sen. Casey issued concern last week

Last week,U.S. Sen. Bob Casey said Community Health Services has “repeatedly forgone efforts to invest in their Pennsylvania facilities and risked the quality and accessibility of care for Pennsylvanians in the pursuit of profit for their shareholders and executives.”

In a letter to Community Health Systems, Casey, D-Scranton, expressed concerns about the company’s business practices amidst efforts to sell the Scranton hospitals.

“It is CHS’ responsibility to find a trustworthy buyer who has a strong record and experience in running hospitals in order to provide a pathway to safe, affordable, and accessible care for their patients and to the Northeastern Pennsylvania community,” Casey said. “It is (the company’s) responsibility to find a trustworthy buyer who has a strong record and experience in running hospitals in order to provide a pathway to safe, affordable, and accessible care for their patients and to the Northeastern Pennsylvania community.”