Athens' only hospital has been sold to Ardent Health Services and the University of Texas System as part of a larger deal to acquire ETMC.
“This acquisition will allow ETMC to grow and thrive in the East Texas region with new partners who can best provide the necessary clinical expertise, operational proficiency, employee development and financial resources to deliver the best care possible for our patients,” said Elmer G. Ellis, president and CEO of ETMC, in a press release.
Terms of the deal were not disclosed.
The UT System includes The University of Texas Health Science Center at Tyler. Ardent assumes majority ownership and day-to-day operations, the press release shows. The UT System will contribute its Tyler UT Health Northeast hospital and 12 physician clinics to the new 10-hospital system.
“We are delighted to partner with UT Health Northeast and the dedicated physicians, nurses and employees of ETMC,” said David T. Vandewater, president and CEO of Ardent Health Services, in the press release. “At Ardent, we strongly believe in the value of partnerships that bring out the best in each organization. We each share a focus on service and a commitment to providing quality care to the communities we serve. Together, we will continue the great legacy of ETMC.”
In February 2017, ETMC officials began the search for a strategic partner.
In a Sept. 8 story in the Athens Daily Review, an ETMC spokesperson declined to confirm a report that ETMC was preparing to close a deal with Ardent Health Services.
“Once approved by the UT System Board of Regents, this combination will bring unique synergies to the East Texas health-care landscape,” said Kevin Eltife, former state senator and Tyler mayor, and current member of the UT System Board of Regents, in a statement. “The great benefit of these three organizations coming together will be that East Texans will enjoy the best of all possible worlds. A great national health-care system will be integrated with a regional powerhouse in health-care delivery and a leader in health education and research.”
The newly created health system will be an affiliate of the University of Texas System, one of the largest academic and health systems in the country. The partnership will invest $150 million for improvements over five years and provide other resources to support the operation, the press release shows.
Governance will be shared through a newly formed board of directors that will include local physicians. Proceeds from the transaction will be used to create a local foundation to further the health and wellness of East Texans. The transaction is expected to close following the completion of due diligence and required regulatory approvals.
In April 2017, Moody's Investment Services reported it downgraded ETMC's debt rating to B3 from a Ba1.
“The action affects $280 million of outstanding rated revenue bonds issued by Tyler Health Facility Development Corporation and Wood County Central Hospital District,” that report shows. “The rating outlook remains negative.”
Moody's also reported that ETMC continues to make its debt-service payments on its all-fixed rate bonds in full and on time.
“If payment defaults were to occur, recovery would be high with favorable security lien on the bond debt. The Tyler flagship hospital is a sizable and essential provide of numerous tertiary services in a large and growing service area.”
ETMC includes 502-bed East Texas Medical Center Tyler and a network of nine hospitals and 39 clinics, including regional hospitals in Athens, Carthage, Henderson, Jacksonville, Pittsburg and Quitman. Additionally, in Tyler, two other inpatient facilities, the ETMC Rehabilitation Hospital and the ETMC Specialty Hospital, are included in the new health system.
\Other assets include the Olympic Plaza Tower, 13 regional rehabilitation facilities, physician clinics, two freestanding emergency centers, regional home-health services covering 41 counties, a behavioral health center and a 7-trauma center care network, including a Level 1.
“We are honored to be a part of this new regional health system,” said Dr. Kirk Calhoun, president of UT Health Northeast, in the press release. “Our focus at UT System and UT Health Northeast will be on expanding educational opportunities, including training more physicians, nurses and other health-care professionals for our region and beyond. We also believe that the new partnership will foster research that can improve patient outcomes and promote community health in East Texas.”
Ardent operates 20 hospitals in six states, including 445-bed BSA Hospital in Amarillo and 83-bed Seton Medical Center Harker Heights in Harker Heights.