Ashland hospital begins Asante merger process

Ashland Community Hospital may merge with Medford-based Asante Health System in the new year if an agreement is reached between the two and the city approves, ACH board of directors Chairman Doug Gentry announced at a news conference on Thursday.

Gentry will present the ACH board's decision to start the process of negotiations with Asante at Tuesday's City Council meeting. Council members will be able to ask questions, but public comment will be scheduled at a future date.

"It's important to gain the support of the community," Gentry said.

ACH was close to reaching an agreement to be acquired by San Francisco-based Dignity Health, which has ties to the Catholic Church, when Dignity backed out last month after nearly seven months of negotiations.

Two services that incited public concern in discussions with Dignity — assisted suicide and abortion — are not at issue with Asante, said Gentry. Asante operates Rogue Regional Medical Center in Medford and Three Rivers Medical Center in Grants Pass.

If a merger takes place to stabilize ACH's financial future, back office positions may be eliminated because of duplication, said Gentry. But he also anticipates that, overall, Asante will increase the staff, not reduce it.

"They want to grow, expand and enhance what we already do," he said.

ACH has operating rooms and a Center for Wound Healing & Hyperbaric Medicine that Asante needs, he said.

Asante's president and CEO Roy Vinyard said independent hospitals are looking for opportunities to find "stronger partners with similar visions," as health care continues to change, especially with the Affordable Care Act.

In October, Mark Marchetti, ACH chief executive officer, said the hospital could be closed in a year if it remains independent. Former ACH board chairman Dr. Doug Diehl told the council on Oct. 16 that ACH has four to six months' worth of operating cash left.

Unreimbursed costs associated with treating Medicare and Medicaid patients, other unpaid medical bills and charity care contributed to a $3.3 million loss last fiscal year and a $1.5 million loss in 2008-09, Marchetti said.

On Monday, ACH board members and Asante's senior team will meet to plan the process of working out the details of the complex business decision. ACH will make financial accounting records available to Asante.

Because the hospital operates under a long-term lease with the city, the council will have a say in approving whatever lease arrangement emerges out of an alliance.

The deal would require a lease arrangement with the city, an agreement to acquire the hospital from the city and ACH board, and an agreement with the Ashland Community Hospital Foundation.

The city is the sole corporate member of the nonprofit Ashland Community Healthcare Services, which oversees ACH, making the City Council the lone decision-making entity for the hospital concerning sale, sublease, merger or consolidation of ACH assets with any affiliation partner. The city also retained ownership of the property, buildings, improvements and fixed equipment.

After Dignity backed out, Asante and Providence Health & Services of Seattle, which operates Providence Medford Medical Center, revised their initial proposals for ACH to consider.

Both offered what Gentry called strong proposals, but Asante offered "certain financial securities for the future."

Reach reporter Janet Eastman at

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