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By Mark Tosczak
Mission Health’s board of directors has signed an agreement to sell the Asheville-based health system to for-profit hospital operator HCA Healthcare for $1.5 billion.
The deal still has to be approved by N.C. Attorney General Josh Stein before the transaction can be finalized.
HCA is also committing to invest $430 million over the next five years in capital investments to complete the Mission Hospital for Advanced Medicine, build a replacement hospital for the Angel Medical Center in Macon County and construct a new behavioral health hospital. HCA and Mission will also each put $25 million into an “innovation fund” to invest in businesses “providing innovations in health care delivery that benefit the people of western North Carolina.”
Under the agreement, announced in a news release Friday morning, HCA will maintain “key clinical services” for at least five years and keep open all rehabilitation and acute-care hospitals for at least 10 years — except for St. Joseph’s Hospital, which “was already planned for transition,” the news release says.
“None of these protections exist for Mission Health programs or facilities today,” the news release notes.
The facilities will continue to operate under the Mission brand name, the news release also says.
“Mission Health’s national reputation as a leader in clinical excellence and patient-centered care is consistent with our focus on quality and safety,” Chuck Hall, president of HCA’s National Group said in the news release. “Mission will be an exceptional addition to the HCA Healthcare family.”
Proceeds from the sale would be used to fund the newly created Dogwood Health Trust, a foundation formed to improve people’s health in 18 western North Carolina counties by focusing on social determinants of health.
Mission announced its intent to sell itself to HCA in March. Mission leaders said then, and have continued to say, that cost pressures they face would make it difficult or impossible for Mission to continue to operate as it has.
By selling itself to HCA, CEO Ron Paulus said, Mission would gain access to lower prices for supplies, equipment, more efficient billing and vast economies of scale that only HCA, the nation’s largest hospital operator, can offer.
Mission started looking for a buyer early in 2018, after its board of directors decided that selling was its best option. Mission identified a handful of potential buyers and eventually invited two to make presentations to its board; HCA was the only for-profit company Mission considered.
Mission leaders declined to comment any further on Friday.
HCA, based in Nashville, had $43.6 billion in revenues last year. It employs more than 250,000 people and operates 178 hospitals and 119 surgery centers in 20 states and the United Kingdom. Its purchase of Mission would be the company’s first foray into North Carolina.
Some in western North Carolina have worried about what it might mean to have a for-profit company take over their local hospitals — especially in the region’s rural communities. They’ve pointed out that rural hospitals in North Carolina and across the country are having financial difficulties, and that many have closed in recent years. The terms of the deal would seem to prevent HCA from closing those hospitals in the short term, at least.[sponsor]
The HCA purchase of Mission marks the further transition of North Carolina’s hospitals from non-profit to for-profit ownership. For generations, nearly all state’s hospitals were either government-owned or nonprofits.
Duke Lifepoint, which owns eight hospitals in the state, is a for-profit company. Lifepoint is being acquired by private equity firm Apollo Management Group. HCA’s purchase would add another seven hospitals to the tally of for-profit hospitals.
Duke University management professor James Emry told N.C. Health News in July that the HCA deal could be a precursor to additional North Carolina acquisitions by the Tennessee hospital chain. And Mission’s decision to sell to a for-profit company, he said, could also trigger other nonprofit hospitals across the state to consider for-profit buyers.
Mission’s news release says “nearly all” of Mission’s facilities and clinics will become a part of HCA. Those include:
- 763-bed Mission Hospital (Asheville)
- 80-bed CarePartners Rehabilitation Hospital (Asheville)
- 49-bed Mission Hospital McDowell (Marion)
- 25-bed Angel Medical Center (Franklin)
- 25-bed Transylvania Regional Hospital (Brevard)
- 25-bed Blue Ridge Regional Hospital (Spruce Pine)
- 24-bed Highlands-Cashiers Hospital (Highlands)