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Health and Medicine

Akron General may go for-profit in a deal with the Cleveland Clinic and CHS
Majority owner would be for-profit Community Health Systems of Nashville

Mark Urycki
Akron General will become a for-profit hospital under a deal with the Cleveland Clinic and Community Health Systems.
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In The Region:
The board of Akron General Health Systems approved a letter of intent yesterday (Thursday) for to hold talks that could turn it into a for-profit company. The Nashville-based  chain, Community Health Systems, and its new partner, Cleveland Clinic, purchased Akron General for an undisclosed sum. It’s a three-way collaboration, but officials say the hospital will maintain its local board. 
LISTEN: Stover and Huston discuss the partnership

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Akron General is a pretty big operation with its medical center, Edwin Shaw Rehabilitation Institute, Lodi Community Hospital and wellness centers.

But it could never achieve the purchasing power of Community Health Systems, which runs 150 hospitals.  The chief strategy officer for the Cleveland Clinic, Ann Huston, says the move will cut costs.

“When you have that much scale you’re able to operate a lower unit cost.”

Add to the Nashville chain's size,  the expertise of Cleveland Clinic, and the president of Akron General, Tim Stover, calls the new partnership a “home-run.”  A specific deal is expected to be worked out by early 2014.

Akron General and the Clinic are relatively close, but Stover says no one is cutting back service.

“The goal of this whole relationship  is about growth. It’s not about cutting. ... We’re going to continue to offer the services that we’re offering.The good news is we’ll be able to offer them with more resources and more expertise if we need it.”

Questions about Medicare
But the alliance does come with some baggage.  Federal investigators have been investigating CHS's Medicare billing and admission procedures since 2011. In July, the company disclosed that the feds had expanded their investigation. Stover says the Akron community should not be concerned.

“We looked into that, both we and the Clinic, and this was actually related to a Medicare issue in 2010 when there was a confusion between observation and in-patient. Actually that was a confusion all over the country.”

Akron’s biggest healthcare system, Summa, is awaiting a new partnership deal with the non-profit Catholic Health Partners. Hospitals have been concerned about changes coming with the Affordable Care Act. 

More consolidation is coming
“The change I’ve seen over the last 18-24 months, I’ve never seen it like this in the 33 years I’ve been practicing,” says Stover.

Huston says the level of consolidation in health care at unprecedented levels.

“And this is an example of a creative way for each of us to pool our resources and do what we do best to continue to provide services to a community.”

Stover says it’s still uncertain what Obamacare will bring but he does know being more efficient is a must.

“The reimbursement for the same things that we are doing now will be significantly less ... as far as the governmental payers are concerned, Medicare and Medicare, and the commercial payers are following right along.”

In turning for-profit, Akron General will be required to establish a community foundation. Stover wasn’t sure what how much will go into funding that, but he noted one more added value to the community:  the new status means the Akron General system will have to start paying taxes.  

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