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WellSpan, Good Samaritan Explore Affiliation

Good Samaritan Health System in Lebanon, Pa., has signed a memorandum of understanding to affiliate with WellSpan Health, based in York, Pa.

Terms of the deal were not disclosed. Both systems will now undergo due diligence and regulatory reviews, with the intent of signing a definitive affiliation agreement by the end of this year.

Major goals of the deal include improved access to healthcare for local residents, support for population health management and collaboration to recruit physicians and nurses to the area. WellSpan has actively pursued value-based structures. Last October, it created an accountable care organization with Aetna.

"The American healthcare system continues to transform from one that primarily treats individuals when they are sick or injured to one that also manages the health of populations," WellSpan President and CEO Kevin Mosser, MD, said of the proposed partnership in a news release. "In response, we are creating new and innovative ways to help our neighbors reach their health goals in life while preparing to care for an aging population and address a projected shortage of health professionals."

Good Samaritan, which includes a 172-bed hospital, has been searching for a strategic partner since last summer. The organization has been struggling financially — it posted more than $2.3 million in operating losses in fiscal year 2013, and net losses have totaled almost $9 million during the past two years. Good Samaritan was also forced to cut 50 jobs last April.

If completed, Good Samaritan would become WellSpan's fourth acute-care hospital. This past fall, WellSpan closed on a deal that added Ephrata (Pa.) Community Hospital.

More Articles on Hospital Transactions:
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4 Transaction Models for Community Hospitals

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