UC, Jewish Health System Inc. and Fort Hamilton Hospital Reach Accord

CINCINNATI—Representatives from the University of Cincinnati, Jewish Health System, Inc. and Fort Hamilton Hospital and Healthcare Corporation announced today that they have signed a binding Memorandum of Understanding (MOU) resolving their respective interests in the Health Alliance. The parties expect to sign the final settlement agreement by March 31.

This agreement is expected to facilitate the continued provision of high quality patient care by all the hospitals, and will enable them to move forward in their respective spheres of activity and community service.

The agreement will leave the University of Cincinnati as the sole member of the Health Alliance.

The parties were aided in reaching agreement by an experienced mediator, Cleveland lawyer Niki Schwartz. The parties also expressed their appreciation and gratitude for the leadership of Attorney General Richard Cordray, who initiated the mediation process.

The University of Cincinnati, Jewish Health System, Inc. and Fort Hamilton Hospital and Healthcare Corporation have interests in the Health Alliance of 49 percent, 45 percent and 6 percent, respectively. Jewish Health System, Inc. last year announced its intention to sell Jewish Hospital to Mercy Health Partners. The closing of that transaction occurs today. Fort Hamilton Hospital and Healthcare Corporation also announced earlier this month that it would pursue an affiliation agreement with Kettering Health Network. In August 2009, the University of Cincinnati unveiled plans to form a new health system called UC Health.

The MOU provides for the orderly departure of the Jewish Hospital and Fort Hamilton Hospital from the Health Alliance, thus enabling the parties to avoid a costly and unpredictable unwinding, or "dissolution,” and protracted, costly and distracting litigation. All parties remain open to future collaboration, and the three characterized the MOU as a product of compromise and a document that is both fair and reasonable in its approach and terms.

The MOU addresses issues related to the separation of the Jewish Hospital and Fort Hamilton Hospital from the Health Alliance, shared responsibilities for various matters, the allocation of the jointly owned assets of the Health Alliance, including West Chester Medical Center, Alliance Primary Care, Drake Center, the Alliance Business Center as well as several joint ventures, including Lindner Center of HOPE and University Pointe Surgical Hospital. Among other things, this agreement will enable the University Hospital to move forward and continue its important community service role, while the College of Medicine continues its vital role in medical education, research and patient care.

Although they are separating, the University of Cincinnati, Jewish Hospital and Fort Hamilton Hospital will each continue to be committed to their communities, providing high quality patient care and services. In response to the agreement, University of Cincinnati President Gregory H. Williams, Jewish Health System, Inc. Board Chair Robert Kanter and Fort Hamilton Hospital and Healthcare Corporation Board Chair Bob Weigel each made the following, separate statements:

"This is the beginning of a very exciting transformation of health care in Greater Cincinnati. Through this agreement, UC Health, the region’s only academic medical center, will strengthen its teaching and research programs that translate discoveries in research into cures for patients. UC Health will also operate Alliance Primary Care, one of the area's largest groups of dedicated primary care physicians offering easy access to patients, as well as University of Cincinnati Physicians, the largest group of physician specialists in almost all disciplines. UC Health will also operate the brand new West Chester Medical Center and the respected University Hospital and other locations. I am very excited about the formation of UC Health and what it will mean for health care in our community,” President Williams said.

"We believe this agreement is fair to all parties and we look forward to Jewish Hospital’s future as part of Mercy Health Partners. Both Jewish and Mercy share a rich tradition of healing and providing quality healthcare to people of all faiths and backgrounds. Being part of the Mercy system will make both Jewish Hospital and Mercy stronger, more robust, and better able to serve our patients, and will allow Jewish to expand its role in the region’s healthcare network,” Kanter said,

"The decision to enter into an affiliation agreement with Kettering Health Network strengthens Fort Hamilton’s ability to maintain the latest in medical and surgical health care for the Hamilton and Butler County. Kettering Health Network has been committed to fulfilling mission by delivering nationally-recognized clinical quality and outstanding patient care that will keep us viable in this highly competitive market. We are impressed with Kettering Health Network’s track record of sustaining high quality care and financial performance,” Weigel said. "They have also shown the ability to successfully integrate different hospital cultures into theirs. In the past 10 years they have added Grandview and Southview medical centers and Greene Memorial Hospital. As a community hospital serving Hamilton and Butler County, we think it is a good fit.”

A final settlement agreement, to be signed by March 31, will finalize complex financial and organizational issues related to the Health Alliance. Also, a transition services agreement will provide the Jewish Hospital and Fort Hamilton Hospital with administrative services as they transfer over to other health systems. The Alliance Business Center will provide transition services to those hospitals, and will continue to provide services to University Hospital, West Chester Medical Center, and Alliance Primary Care well into the future.

By the end of March, Jewish Health System, Inc. and Fort Hamilton will cease their roles in Health Alliance governance. Thus, the University of Cincinnati will be the sole member of the Health Alliance. The University of Cincinnati and Jewish Health System, Inc. however will remain responsible for Drake Center for a period of 18 months. During that time, they will work closely with the Drake Center board and administrators, key elected officials and others to develop a communitywide solution to try to secure Drake Center’s long-term future, as the hospital is mounting unsustainable losses that UC Health alone still could not support. As reported recently by the media, Drake Center is already actively pursuing new partners, and five national hospital companies have expressed some interest in forming a possible partnership with Drake.

The settlement also resolves issues relating to Alliance Primary Care (APC), a wholly owned subsidiary of the Health Alliance, by preserving the relationships that various APC physicians and offices have with their primary Health Alliance hospital.