Hospitals approve binding merger agreement

ALTOONA, Pa., October 13, 2004 — The merger of Altoona Hospital and Bon Secours-Holy Family Hospital has been sealed with the approval of a Definitive Agreement.

The hospitals will begin operating as one health system on or about Nov. 1, 2004.

Drawn from the Memorandum of Understanding and Term Sheet agreed to in March, the Definitive Agreement sets forth the final governance structure, as well as certain operational and ethical standards that would apply to the health system.

In coming weeks, the hospitals will be working on transitional matters, including:

• Formally notifying third parties that will be affected by the merger, such as insurers, contractors and vendors.
   
• Naming a new 18-member Board of Trustees that will govern the new health system.
   
• Finalizing a name for the health system.

Also in the interim, physicians from both hospitals will continue to develop bylaws for a unified medical staff.

The hospitals have reached an agreement with the Pennsylvania attorney general’s office. The attorney general will be making an announcement.

The Definitive Agreement provides for the operation of the hospitals under one corporate entity, with two operating campuses — an Altoona Hospital campus and a Bon Secours campus. The current health care affiliates of each hospital will become affiliates of the combined system.

Under the proposal, Robert E. Wertz, M.D., will be chairman of the new health system board of trustees. James W. Barner, president and chief executive officer of Altoona Hospital, will be president and chief executive officer. Daniel S. Duggan, chief executive officer of Bon Secours-Holy Family Hospital, will be executive vice president.

One unified medical staff will serve both campuses. Subject to existing contractual obligations and facility-specific rules, physicians now practicing at either hospital will be granted medical privileges at both hospital campuses.

The new health care system will accept the insurances that are now accepted at either hospital.

Studies commissioned by a joint Collaboration Steering Committee, drawn from the boards and medical staffs of both hospitals, identified numerous benefits from a merger, including the opportunity to improve the quality of clinical services, the opportunity to consider new or expanded services in many clinical areas, and the opportunity to achieve significant cost savings.

Hospital leaders say the merger will make possible a bright future for health care in the community, while preserving important characteristics of the hospitals.

“The combining of our two systems presents us with an unparalleled opportunity to enhance the quality of medical services for the people of our region,” Dr. Wertz said.

Both Mr. Barner and Mr. Duggan said the agreement “will preserve and expand local health care services.”

Sr. Anne Lutz, C.B.S., senior vice president of sponsorship for Bon Secours Health System Inc., says the merger “ensures the continuance of Catholic acute health care in the Diocese of Altoona-Johnstown.” The Bon Secours campus will continue to follow the Ethical and Religious Directives of the Catholic Church.

The hospitals have established a toll-free telephone number for any community resident or hospital employee to ask questions. The telephone number is 1-800-368-2273.
 

 Joint release from spokespersons:

Ron McConnell, Altoona Hospital
814-946-2271

Dave Cuzzolina, Bon Secours -
Holy Family Hospital
814-949-4108