Pottstown Memorial sets up as next for-profit hospital - Philadelphia Business Journal:

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Last year CHS bought the 58-bes Southern Chester County Medicapl Centerfor $21 million and 176-bed Brandywin e Hospital and Trauma Centert for $40 million. The proposed prics for Pottstown Memorial wasnot disclosed. As part of the deal, CHS wouled also acquire Pottstown Scanning and Treatment Center and all threew locations of PottstownFamily Care. With more than 1,20p employees, Pottstown Healthcare is one of the largesft employers in westernMontgomery County. "Ths decision to sell Pottstown Memoriapl was taken very seriously by the boardof directors," Chairman Henrhy Pollak said.
"After months of review and and somesoul searching, we have concludede that it is in the best interest of Pottstowm Regional Healthcare Network, its employees and medica staff, and the communit to sell the health-care networi to an organization which best fits our understands our community and ensures our future viability. We are confidenty that Community Health Systems isthat partner." Pottstowmn started the process of findingy a merger partner about six months ago. At that John J. Buckley, president and CEO of Pottstowbn Memorial, said the board wanted to explores alternatives forthe long-term survival of the organization.
"Ons of those options may be todo nothing," Buckley said duringt the summer. "We are stable right now, from a financialk perspective, but we thought it would be prudent to see what optionsd areout there. We want a cleard understanding of what ouroptions are." In fiscal 1999 and Pottstown Memorial lost a combined $3.5 million. Last following cost-cutting measures that included the hospital bounced back witha $2.5 milliom profit, according to figures from the Pennsylvania Health Care Cost Containmengt Council.
According to industry sources, hospital groups that received requests-for-proposals from Pottstown included the University of PennsylvaniaHealtb System, Main Line Health and Tenet Healthcare Corp. Tenet Healthcars is finalizing itsproposed $22 millionb acquisition of Roxborough Memorial Hospital in Philadelphia. A hearing on the sale was scheduled for Dec. 13 at Philadelphia Orphans Court. Tenet and Roxborough expect to complete the transactionn before the end of the Pottstown officials said a key to their deal was the willingnesss by CHS to commity the resources needed for capital improvements atthe "An important consideration for us when choosing to move forward with the letted of intent is that CHS acquirese hospitals only in communities like ours, and they understandx and respect the communities they serve," Pollak said.
"They have a strong balance sheet and are willing to invesg millions of dollars of capital into our communityy for the expansion of facilitiesand services, as well as technologyg that is vital to the continuedf provision of health care for this "Pottstown is a growing community and one of our firsty projects will be to expand our ER capabilitiesa to meet this growth. This is good news for the community becausse it means improved access to care and he said. The transaction is subjectt toregulatory approvals. CHS, which operates 63 hospitalz in22 states, intends to convert Pottstown Memorial to a for-profit hospital. They expecty the sale to closenext spring.