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MGH sale expected

March 6, 2012
By JOHN PEPIN - Journal Staff Writer ( , The Mining Journal

MARQUETTE - The Marquette General Health System Board of Trustees has signed a memorandum of understanding to join Duke LifePoint Healthcare, a joint venture of Duke University Health System Inc. and LifePoint Hospitals.

The nonbinding agreement allows both Marquette General and Duke LifePoint to move forward with pursuit of the acquisition. No terms of the deal were made public today. A final decision on approving the purchase will be made by the Michigan Attorney General because Marquette General would change from a nonprofit to a for-profit facility.

"The acquisition by Duke LifePoint is an historic opportunity for Marquette General and the Upper Peninsula," said Brad Cory, chairman of the Marquette General Health System Board of Trustees. "As part of Duke LifePoint, we will have the ability to improve the quality of health care in the Upper Peninsula, strengthen Marquette General financially and expand our role in the region, working with other Upper Peninsula hospitals."

Article Photos

Marquette General Hospital is seen in this file photo. The hospital’s board of trustees and Duke LifePoint Hospitals of Tennessee have signed an memorandum of understanding which will likely lead to MGH?being acquired by Duke Lifepoint. (Journal file photo)

MGHS President and Chief Executive Officer Gary Muller said he sees no downside to the acquisition, which combines Marquette General with the quality of Duke University Health System - ranked in the Top 10 across the country for quality over the past 22 years - with the operational resources and experience of LifePoint Hospitals, which manages 54 community-based hospitals, many of which are rural.

"This is a new model for health care and is very exciting," Muller said. "We'll be a national model."

For the next several weeks, both Marquette General and Duke LifePoint will be examining all aspects of the proposed acquisition and negotiating a definitive agreement.

"For two to four months, we'll be in the legal document phase," said Mick Vonck, treasurer of the MGHS board.

Marquette General will become the fourth hospital in the Duke LifePoint network and the first in Michigan. Marquette General, which will retain its name and local board under the deal, will be the largest of the Duke-LifePoint facilities and second-largest of LifePoint's more than four dozen hospitals.

Duke-LifePoint has two other hospitals in North Carolina and one in Virginia.

Other benefits for Marquette General under the deal are expected to include a net increase of 64 doctors over the next five years, satisfaction of all debts and creation of a community health foundation, which will be a separate nonprofit entity.

"Our intent is to have Marquette General become stronger," Muller said.

With the strength Duke-LifePoint can provide, Marquette General officials expect to not only be able to halt out-migration of patients to hospitals in other states, but make Marquette General an enhanced destination point for those seeking high-quality medical care.

"In-migration is the new buzz," Vonck said.

Marquette General currently receives patients from across the U.P. and provides care in 65 specialties and subspecialties.

Duke-LifePoint officials, who are expected to visit Marquette General Wednesday to talk with staff, are pleased with the proposed acquisition.

"Duke LifePoint is building a strong system of quality-driven hospitals and providers that are well positioned for success," said LifePoint Chairman and Chief Executive Officer William F. Carpenter III. "Duke LifePoint and Marquette General have a great opportunity to capitalize on each organization's innovative approach to integrated delivery of quality healthcare in this region. Together, we will broaden the clinical services available here and advance our shared dedication to clinical quality and patient safety."

In January, Marquette General officials announced the search for an "upstream partner," to help strengthen the hospital's position. Muller said Marquette General officials considered 10 proposals and five companies were interviewed, with only Duke LifePoint having the unique blend of resources and quality. In turn, Muller said Duke LifePoint was interested in Marquette General.

"Marquette General is coming from a position of strength, so Duke LifePoint sees us as an asset," Muller said. "They are coming to us as a company wanting to invest."

Duke LifePoint's acquisition proposal includes significant financial commitments to enhance quality care and patient safety and expand service lines to better serve patients throughout the U.P., according to Marquette General officials.

Investments will be made in major capital improvements, including construction of a state-of-the-art outpatient surgery center, comprehensive cancer center, private patient rooms, new technology and new information technology infrastructure.

"We're currently licensed for 307 beds," Muller said. "Eventually, we would anticipate 307 private rooms."

The proposal also includes investments to boost physician recruitment. Resources from the transaction will be available to meet the hospital's pension obligations and provide funding for foundation grants to support community-based health care organizations and initiatives.

In addition, Duke LifePoint shares a fundamental commitment to the Marquette General workforce and to a continuation of MGHS's historical provision of charity care. Muller said Marquette General employees will be offered positions at the same rate of pay or better with Duke LifePoint.

The acquisition is also expected to provide an economic boon to the area through construction of new facilities, spending at local businesses and tax revenue.

"This is a significant thing for our community, municipal taxes will increase dramatically," Muller said.

Marquette General officials said the hospital's medical staff of more than 200 doctors works as a team with 2,400 employees in caring for about 12,000 inpatients and more than 350,000 outpatients each year.

"As part of Duke LifePoint, we will be able to create new opportunities and new jobs for doctors, nurses and health care professionals in the Upper Peninsula," Muller said. "We will have new centers of excellence at Marquette General, new and expanded service lines, and mentoring and training programs for our staff to improve patient care."

John Pepin can be reached at 906-228-2500, ext. 206.



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