HOSPITAL MERGERS: One Delayed, One Approved
"The inability to resolve five complex issues has held up the deal between ScrippsHealth and Palomar Pomerado Health System," the San Diego Union-Tribune reports. A public vote on the joint venture has been postponed from June to November. David Owen, a spokesperson for Palomar Pomerado, said, "There's a lot of legalese, tons of records, contracts and timelines to go through. And there are still five specific things that they're hammering out." One point of dissension is over the "schedule of payments from Palomar Pomerado to Scripps over the 30-year term of the agreement." Palomar Pomerado has agreed to pay $105 million for capital improvements to Scripps over 30 years in exchange for Scripps agreeing to retire Palomar Pomerado's $115 million in debt. In order to guarantee payment, Scripps wants $65 million of the fee to be placed in trust. "Our board thinks that's too much money for too long a period of time," Owen said. Another sticking point is "Palomar Pomerado's request that 13 of the 16 members of the Scripps board be required to approve any item of critical importance ... instead of a simple majority." The remaining unresolved issues include "who pays for earthquake safety retrofitting; grounds for termination of the agreement; and who actually would manage the Palomar and Pomerado hospitals." However, Owen said that "none of the issues is considered important enough to kill the deal" (Clark, 3/4).
Mesa Vista Hospital
In other hospital news, the "Sharp HealthCare group has taken control of Mesa Vista Hospital, a substance abuse program and four outpatient offices" in a deal finalized Sunday, the San Diego Union-Tribune reports. Sharp will acquire the "150-bed psychiatric hospital, the outpatient program and the 16-bed Vista Pacifica center." Sharp will pay no cash but will assume $7.7 million in outstanding debt (3/4).