Winston-Salem, N.C.-based Novant Health said Monday it is terminating partnership negotiations with Savannah, Ga.-based Memorial University Medical Center, which Memorial officials called a "make or break" deal for its future, according to Savannah Now.
"I regret to announce that, after months of negotiations, Novant Health has decided to terminate negotiations of a transaction that would have allowed Memorial to fully join our organization," Novant President and CEO Carl S. Armato told Memorial officials in a one-page memo, according to the report. "Unfortunately, discussions became more complicated after the Memorial Board approved the [agreement] and the [Chatham County Hospital Authority] became directly involved in the discussions."
In his memo, Mr. Armato indicated the disagreement between Memorial Health and CathamCountyHospital cemented Novant Health officials' decision to end the partnership talks.
"The Authority has indicated its intent to go beyond its historical role and has insisted upon inserting itself into the detailed oversight of Memorial operations, potentially resulting in inconsistent direction from two differing governing bodies," said Mr. Armato. "It has become clear to us at Novant Health that there is a lack of alignment among the Authority, the Memorial Board and the other local stockholders. We do not believe that proposed partnership would be successful in such an environment. Under the approach advocated by the Authority, we would lack the flexibility to implement best practices quickly and meet the demands of the rapidly changing healthcare landscape."
Hospital Authority Chairman Don Water said Novant Health's decision was "a complete surprise to me," according to the report.
Under the proposed partnership, Novant Health would have infused $295 million in cash into Memorial over the first 10 years of the agreement, as well as $164 million in bonds supported by the Chatham County Commission in 2012, according to the report. But the talks were stifled because lease arrangements between the Chatham County Hospital Authority and Memorial were seemingly at odds.
The partnership would have provided financial stability to Memorial, which reported more than $22.6 million in net loss last year.