The Definitive Blog

2013-03-01 – Geisinger, Lewistown Hospital Extend Merger Negotiations

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Lewistown Hospital and Geisinger Health System have extended the original 90-day deadline leading to the definitive merger agreement, from March 5 to June 30, said Kay Hamilton, president and CEO of Lewistown Hospital.

“To the average person this seems like slow progress, but we’re still in the paper part of it where we’re developing an agreement,” Hamilton said. “Right now, we have a first draft and have begun serious negotiation in great detail.”

Major negotiations, such as insurance acceptance, continuation of the nursing school and development of capital gain, originally agreed upon in the letter of intent signed December 2012, remain consistent agreements during the current process, Hamilton said.

“Both entities have already agreed on the things we are going to do,” Hamilton said. “Now, we’re focusing on how these goals will be achieved. It’s one thing to say you’re going to keep the hospital open at its current level or better. It’s another to figure out how you’re going to do that.”

At this point, Lewistown Hospital and Geisinger Health System are immersed in the due diligence process, involving the exchange of operational documents, Hamilton said. However, before either entity can analyze the information, the lawyers must first complete a redacting process in accordance with antitrust laws, she added.

“It’s important to remember, until the merger is complete, Geisinger and Lewistown are separate competitors,” Hamilton said. “So we don’t violate any antitrust laws, our lawyers must go through the thousands and thousands of documents to edit information that can’t be shared between us at this point.”

Once this process is complete, each entity can then examine the other’s operational process and begin to combine the documents for the definitive merger agreement, Hamilton said.

In the meantime, management, physicians and staff from Lewistown Hospital have been meeting with their Geisinger counterparts on a regular basis to discuss the merger as it applies to each department, Hamilton said.

“I’d say there’s a meeting of some sort going on every day, on one level or another,” she said. “I meet with the Geisinger administration every other week in-person and we communicate by phone a couple times a week. The hospital is very much engaged with the process.”

Additionally, the hospital has begun working with the Pennsylvania Attorney General’s office and will continue doing so until the merger is complete, Hamilton said.

“We have begun sending information and filing various document requests with the Attorney General’s office,” she said. “Once they’re finished reading the initial paperwork, we’ll receive input on how the merger should be carried out. They would say something like, ‘We agree to this, our opinion is that it will work, but we need you to do this, this and this for it to work.'”

The definitive merger agreement is expected to be signed by Lewistown Hospital and Geisinger Health System on June 30, Hamilton said. It will then have to be approved by both boards and the attorney general. If everything goes perfectly, the merger will be official on July 1, she said.

March 18, 2013