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October 8, 2013

Clark Memorial, Norton merger still in works

Hospital CEO hopes to get vote from county officials in December

JEFFERSONVILLE — The marriage between Clark Memorial Hospital and Norton Healthcare isn’t finalized. But the courtship is still going strong.

The two entities announced in a joint press release in November that they were exploring a potential partnership. At a recent quarterly employee meeting, Clark Memorial employees were told the relationship was likely to materialize soon.

“We did talk about this topic and let them know that no agreements have been signed, that we’re still in conversations with them, that we’re soliciting input from the [Clark County] commissioners, the [county] council and our medical staff leadership as we develop the relationship going forward,” said Martin Padgett, president and CEO of Clark Memorial Hospital. “It was basically to say to our team members, ‘We first let you know about this last November, and it’s not like nothing has been going on, but there’s a lot of things that have to be discussed and we’re still in conversations with them, and that we really feel like it’s going to be a great thing for our community and a great thing for our patients, and a great thing for us as a hospital.’

“But there’s really nothing definitive that has been decided yet.”

Clark Memorial likely will execute a letter of intent to negotiate with Norton Healthcare around the end of October or early- to mid-November, Padgett said. The letter of intent will allow both parties to complete due diligence before signing off on a partnership. Due diligence can’t be performed before the letter of intent is signed, as the hospital and Norton are competitors, Padgett said.

“We’ll have to [sign that] at some point, and we’re very close to that, but we’re not doing that today,” Padgett said.

The county commissioners and county council will have to approve any partnership between the two entities, as Clark Memorial is a county hospital. Padgett has been briefing members of both entities on the potential partnership, he said. Padgett would like to put that up to a vote in December, he said.

“If we were to get a positive vote in December, there’s a lot of logistics that have to go on before the organizations come together, and to try to do that over the holidays just does not make sense,” Padgett said.

That would put the timeline for completion of an agreement somewhere in the second quarter of 2014, he said.

“It’s hard to speculate around timing, but I would say generally speaking, that sounds about right,” Norton Healthcare Spokesman Thomas Johnson said. “It may be that it takes us through the rest of the operational details, exactly how this will work, and then maybe by the second quarter of next year, we’ll actually talk about specifics and maybe start to see some motion and see some plans take effect. So I’d say that’s accurate.”

The partnership of Norton Healthcare with the hospital would likely result in the creation of a new fiduciary board to replace the current Clark Memorial board of directors, Padgett said, but added that he expects the members of the new board to be comprised of Southern Indiana residents.

Commissioners President Jack Coffman said a partnership with Norton Healthcare would ensure Clark Memorial’s future in Clark County.

“It will reduce the possibility of financial problems that could occur down the road, which may make the county liable if those things were to begin to happen, if the hospital ever got into a situation where it started losing money or not being able to meet its debt responsibilities,” Coffman said.

The hospital provides free medical care to jail inmates and free rent to Clark County Health Department offices. The hospital is working to get the partnerships it has established with other local entities memorialized in print so that they may continue to be honored when the partnership takes effect, Padgett said.


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