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Halifax Regional, Sentara sign merger agreement
SoVaNow.com / April 30, 2013Officials with Halifax Regional Health System (HRHS) in South Boston and Norfolk-based Sentara Healthcare have signed a formal affiliation agreement and now await regulatory approval of the deal, which is projected to go into effect July 1.
The looming partnership between the two hospital systems was the focus of a public meeting Monday at the hospital’s Leggett Auditorium, which drew a turnout of hospital employees and citizens from the HRHS service area, which includes Halifax, Mecklenburg and Charlotte counties.
Terms of the affiliation deal have not been revealed pending approval by the Attorney General’s Office, which has a 60-day review period. The HRHS Board of Directors approved the agreement last week.
Halifax Regional CEO Chris Lumsden hailed the affiliation, saying it gives Halifax Regional its best chance to grow in a challenging health care environment.
“We believe that working with a quality organization like Sentara gives is the best chance not to survive, but to thrive into the future,” said Lumsden. “We think it’s a great fit with Sentara. We think the chemistry is right.”
Lumsden was joined by HRHS Board President David White of South Boston and Sentara Vice-President Ken Krakaur in presenting the general outlines, though not the specifics, of the agreement.
White and Lumsden emphasized that HRHS’s community orientation would remain intact under a local board of directors, although the existing board will shrink from 36 to 18 members, with 15 representing HRHS, and three to represent Sentara.
After three years, the chair will shift to Sentara, and after two years it will alternate back to a Halifax Regional representative.
In addition to retaining the board of directors, Halifax Regional will name a separate panel to monitor Sentara’s adherence to the affiliation agreement’s covenants over a 10-year period.
Lumsden offered assurances that Sentara would seek to grow the health care system, both by leveraging its expertise and economies of scale, and by investing in operations. “Substantial capital will be infused over a 10-year period of time here at Halifax Regional Health System,” he said.
Sentara has agreed by covenant to uphold the hospital’s 16 primary services, and keep the HRHS framework — comprised of the South Boston hospital, clinics and nursing homes, including Meadowview Terrace in Clarksville — in one piece. HRHS also operates family care practices in Chase City and Clarksville. “All the pieces of HRHS will be held together and be part of Halifax Regional going forward,” he said.
The HRHS board opened a debate on whether to seek a partner more than two years ago, which led to a decision to invite offers from interested parties. From 20 initial contacts, the board narrowed the field to 10 candidates, then five, then four, before selecting Sentara.
The Norfolk-based not-for-profit chain operates 12 acute care hospitals in Virginia, nine in the Hampton Roads region. It also owns the Martha Jefferson Hospital in Charlottesville, Rockingham Memorial Hospital in Harrisburg and Sentara Northern Virginia Medical Center in Woodbridge.
South Boston would become the first rural hospital in the system, representing a challenge and an opportunity for Sentara, said Krakaur, company vice-president.
“We’re very excited about this affiliation with Halifax,” he said. “Sentara has not run a rural hospital before, but we know most of the hospitals in this country operate in a rural setting.” He said Sentara expects to learn as much from HRHS as it hopes to impart: “This is about culture blending, not trying to change someone’s culture.”
He said Sentara’s employees like working for the company and will find its management style “is very open.”
Lumsden said Sentara’s history as an employer factored into the affiliation decision — no small concern, he added, given HRHS’s status as the largest private source of jobs in the region.
He praised the hospital chain’s longstanding record of never ordering a layoff and said that during the evaluation process, “across the board, Sentara was said to be an exceptional employer, which was very important to us.
“A lot of the time, folks go home thinking ‘how is this going to be affect me.’ One of our areas of focus was how any employer treats its employees,” said Lumsden. He added: “The proof is in the pudding when you can say you haven’t had a layoff in 35 years.”
Beyond a commitment to workplace stability, Sentara offers opportunities for HRHS employees to seek out additional training and promotions elsewhere in the system, although not necessarily in Halifax if no positions are available.
“If we can’t keep someone [with HRHS], I’d like to keep them within the family,” said Lumsden.
Dr. James Priest, president of the medical staff, lauded Sentara for operating some of the safest hospitals in the U.S. and said the affiliation would allow physicians and others to benefit from the outside knowledge that Sentara would bring to South Boston. He expressed the hope that providers would learn more about “the best and worst practices” as part of Sentara’s medical affairs committee.
Still, said Priest, the choice to affiliate was not easy for the hospital to make: “In the end run it was a hard decision. We’ve been an independent hospital for more than  years. To say now that we’re a member of something else, it’s hard,” he said.
Whether to keep the name Halifax Regional Health System, or incorporate it under the Sentara brand, has yet to be decided, said Krakaur.
But he said HRHS’s commitment to providing quality health care and serving the community won’t change.
“Everybody knows everybody here,” said Krakaur, recounting his decision early in the wooing process to strike out on his own and observe the community, which led him to dinner one night at a downtown restaurant. “I felt and witnessed a sense of community that was very strong.” He called Halifax County “very impressive” and added, “We’re very proud to be associated with the community.”
Media release: Halifax Regional, Sentara sign agreement to merge
SOUTH BOSTON — Halifax Regional Health System (HRHS) is pleased to announce that the affiliation agreement between HRHS and Sentara Healthcare (Sentara) has been signed by both organizations.
The 31-member HRHS Board of Directors unanimously approved the agreement during their April meeting and a pre-advertised, public meeting was held April 29 as part of the required steps to complete the affiliation.
HRHS originally announced its plans to affiliate with Sentara in October 2012. Subsequently both organizations have worked together through a thorough due diligence phase. The signed agreement will now move into a 60-day regulatory review phase by the Virginia’s Attorney General. The projected closing date is July 1, 2013
The HRHS Board of Directors explored partnership and affiliation options for more than two years before deciding to affiliate with Sentara. Affiliating with Sentara will strengthen HRHS’s physician and staff recruitment and retention efforts, enhance computer and technology upgrades, facilitate clinical services expansion and quality improvement initiatives, and enable the purchase of expensive supplies and equipment at a lower cost – among many additional benefits.
“Sentara is an outstanding organization with an exceptional reputation, both in the Commonwealth and beyond,” said HRHS CEO Chris A. Lumsden. “Our Board of Directors has put countless hours studying this strategic step for Halifax Regional and we are convinced our affiliation with Sentara will be positive and yield long-term benefits to both organizations and the patients we serve each day.”
CommentsKudos to the folks who put this together. Sentara is a fine health care organization and I think will be a good fit for HRHS.
When rumblings of a merger first got out, I was terrified LifePoint was going to get its tentacles into the Halifax area. That group of buffoons all but destroyed Danville Regional and its reputation is still in the toilet. There's a reason the folks in Danville and Pittsylvania County are pushing to get a Centra Group facility in the area. Now they at least have a Sentara hospital as an alternative.
- By powerhouse on 04 / 30 / 13
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