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Duke Lifepoint merger doesn't alter local plans

LOUISBURG -- The merging of two of the nation's top healthcare providers will mean a healthy bottom line for the parent company of Duke Lifepoint -- the healthcare company preparing to re-open a Franklin County hospital.

And, the change, said Duke Lifepoint officials, doesn't and won't change their plans or commitment to bring healthcare back to Franklin County.

RCCH Healthcare Partners, a Brentwood, Tenn.-based healthcare system, announced last week that it is merging with Lifepoint Healthcare, the parent company of Duke Lifepoint.

The new hospital here in Franklin County will operate under the banner of Maria Parham, which is a partner with Duke Lifepoint.

The RCCH merger with Lifepoint Health, said Maria Parham Health/Duke Lifepoint Healthcare CEO Bert Beard, doesn't change their plans for the hospital here in Louisburg.

The emergency room and geriatric behavioral health unit are still proposed to open in the first half of October, Beard said, and the new 20-bed unit will follow in the third quarter of 2019.

"With this expansion," Beard said, "we hope to leverage our growing resources and support structure within the subset of Duke LifePoint facilities to continue offering our markets high quality care and service closer to home.

"Our partnership under Duke LifePoint remains strong and our mission of making communities healthier is unchanged," Beard said.

"We are excited what the merger with RCCH Healthcare Partners will bring for our parent company, LifePoint Health, and look forward to addressing the healthcare needs of Franklin County as we expand the impact of our mission and vision locally and more broadly across LifePoint Health."

The merger, officials say, is expected to create an even stronger healthcare provider with more than $8 billion in revenues.

"... We feel pretty confident that this is going to be a good thing for Duke Lifepoint," said Louisburg Town Councilman Boyd Sturges, who played a role in negotiating the agreement that brought Duke Livepoint to Franklin County.

He said the merger doesn't change the terms of the purchase contract, which has a number of requirements related to the level of healthcare Duke Lifepoint is expected to provide.

Among other things, the county lease with Duke Lifepoint:

• Obligated the county to remove and remediate hazardous materials that were on the premises, as well as a 10,000-gallon heating oil underground storage tank. The county was also responsible for installing an above-ground tank.

• The lease is a two-year term and is renewable for up to four additional two-year terms, for a total of 10 years;

• Only DLP has the right to terminate the lease and only under certain circumstances, such as: DLP does not receive the required permits, they would have to spend more than $4.2 million to re-open the emergency department and behavioral health unit, or DLP hasn't entered into a contract with the state with respect to a $10 million grant to operate the mental health unit;

• The hospital would revert back to the county only in the event of a breach of the lease that remains uncured after notice or if DLP no longer offers an emergency department;

• DLP can purchase the hospital at any time during the lease;

• Rent is free.

Sturges said those things haven't changed, and neither has Duke Lifepoint's commitment.

"We've been assured they are not going to close down the hospital or otherwise stop their plans," said Sturges, who noted that he spoke with Beard about the matter.

The merger, Sturges said, should help Duke Lifepoint leverage better business deals, which would mean their efforts to provide healthcare would be bolstered.

"We hope this will allow them to have better negotiation powers in the various market places and will help to provide good quality healthcare to the people of Franklin County."

According to the company's website and a news release:

• RCCH HealthCare Partners is made up of 16 regional health systems located in 12 states. They have more than 14,000 employees and 2,500 affiliated physicians and mid-level providers;

• RCCH is owned by certain funds managed by affiliates of Apollo Global Management;

• Upon completion of the merger transaction, the combined company will be privately held, operate under the LifePoint Health name and be led by William F. Carpenter III, chairman and chief executive officer of LifePoint;

"LifePoint and RCCH are aligned in our missions and commitment to ensuring that non-urban communities across the country have access to quality care, close to home," Carpenter said in a press release.

"Together, we can extend this shared focus while generating new opportunities for growth and partnerships that will help us navigate the changing healthcare industry dynamics.

"I am eager to work with the outstanding teams at LifePoint and RCCH as we continue advancing high quality patient care and making communities healthier;"

• Martin Rash, chairman and chief executive officer of RCCH, said, in a news release:

"The opportunity to join with LifePoint marks a significant milestone in RCCH's history," he said. "The size, scale and focus on growth for the new organization will be impactful for our patients, employees and partners. I am thrilled that these two great companies are coming together;"

• Matthew Nord, a senior partner at Apollo, said: "We are excited that LifePoint and RCCH are combining to create a national leader in community-based healthcare, and are looking forward to the next chapter of the combined company's growth."

Following the close of the transaction, the combined company will be named LifePoint Health, and the company's headquarters will continue to be in Brentwood, Tenn. where both companies' headquarters are currently located.

The transaction is expected to be completed over the course of the next several months, subject to customary closing conditions, including approval by LifePoint's shareholders and receipt of applicable regulatory approvals.

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