Off the table

Plans for a partnership between Rutherford Regional Health System and Mission Health no longer exist.

The July 19 announcement came nearly six months after the two organizations entered into a Memorandum of Understanding — a non-binding agreement that signaled the beginning of a negotiation process that, typically, would have concluded with Rutherford Regional becoming a full-member hospital of Mission Health.

However, that option is now off the table, both parties report. Rutherford officials declined to comment further on future mergers or partnerships with another health system, which most smaller hospitals have done in recent years.

“Our resolve to enhance our ability to grow and provide more services to our patients remains as strong today as it did when we first agreed to examine this opportunity,” said Terry Hines, chairman of the RRHS Board of Trustees, in a statement. “As we open discussions regarding potential partnership with other highly respected health systems, we are confident that our patients will continue to receive exceptional quality care and services from RRHS’ dedicated employees and medical staff.”

Typically, hospital mergers follow either one of two affiliation agreements: a full affiliation or a management affiliation.

Last year, Xpress published a story exploring hospital mergers, including the Mission-Rutherford proposal ("Let's Get Together: WNC Hospitals Face Financial Pressures to Merge" Oct. 17, 2012).  Under the full affiliation that Rutherford Regional Health System and Mission Health were pursuing around that time, the Asheville-based Mission Health would have acquired the RRHS’ assets and essentially become the owner.

When Xpress talked to Mission Health President and CEO Ron Paulus last year, he explained the difference between agreements like this: “The management relationship would be like a dating relationship, and the full affiliation is more like marriage."

Like romantic relationships, though, hospital mergers don’t always work out. In fact, this is the first Memorandum of Understanding between Mission Health and another health system that has not lead to either a management agreement or full affiliation.

"Locally, regionally and nationally, health systems are experiencing many firsts as we adapt to the changing health care landscape,” according to a statement about the terminated MOU from Mission Health. “Additionally, Mission Health faces challenging demographics in Western North Carolina, where our patients are older, poorer, sicker and more likely to be uninsured. However, Mission Health continues to seek opportunities to partner with community organizations who share our goal of improving the health and wellness of our region."

Paulus adds, “After participating in a months-long, intensive process to determine whether and how a partnership would enable both organizations to better meet the needs of our communities, Mission has an even greater respect for the compassion with which Rutherford Regional Health System and its physicians serve its community … We respect and appreciate RRHS’ view that there are other potential partners who may create more value, and we wish them great success.”

Rutherford Regional Health System employs more than 130 physicians, approximately 700 clinical and support staff and 200 volunteers. Mission Health is the sixth-largest health system in the state, and employs more than 1,000 physicians, approximately 8,800 employees and 700 volunteers.