Steward, Landmark reach asset purchase agreement

WOONSOCKET – Landmark Medical Center and Steward Health Care System of Boston signed an asset purchase agreement on Tuesday, an important next step in making Landmark part of the Steward hospital chain.
The price tag was $71.6 million, the total investment Steward will be making over the next five years, including debt repayments of $2 million to Blue Cross & Blue Shield of Rhode Island, in addition to $30 million in project-related capital investment and $4.5 million for physician recruitment.
Last week, Local 5067 of the Northern Rhode Island Nurses and Allied Professionals signed a collective bargaining agreement with Steward, which will involve layoffs of up to 75 of the 625 union employees now working at Landmark and its affiliate, the Rehabilitation Hospital of Rhode Island.
On May 31, Superior Court Judge Michael A. Silverstein approved the bid by Steward to purchase the financially struggling hospital, three years after Landmark was placed under the control of special master Jonathan N. Savage.
To complete the sale, state regulators now have 270 days under the Hospital Conversion Act to review and approve the purchase, the first time a nonprofit community hospital has been purchased by a for-profit hospital chain in Rhode Island.
“Landmark will remain a secular hospital,” said Christopher Murphy, spokesman for Steward, the hospital division of Cerberus Capital Management, an equity firm.
Caritas Christi Health Care, before it was bought by Cerberus in November, had made a bid and would have converted the Woonsocket hospital into a Catholic-run hospital. Negotiations with Caritas broke down in December 2010.
In addition to state regulatory approval, Steward still needs to negotiate an agreement with Blue Cross & Blue Shield of Rhode Island. Murphy said he did not know the status of any negotiations.
Murphy also said that Steward had been in conversations with Thundermist Health Center, the largest community health center in Woonsocket, which saw more than 28,000 medical and dental patients in 2010. “We expect to be collaborating with them,” Murphy said.
Maria Montanaro, the current president and CEO of Thundermist who is planning to step down from her position at the end of June, declined to comment on Steward’s acquisition of Landmark.
In the news release announcing the asset purchase agreement, Steward said that it had invested more than $100 million in what it called “clinical information technology” to enhance communications among its network physicians, including investments in electronic health records.