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CHS seeks patience in Forum recovery
Tenn. company finalizes $120M purchase of Valley hospital system
By GRACE WYLER
youngstown
The sale of Forum Health to Tennessee-based Community Health Systems ends more than a year of uncertainty about the future of the hospital system.
Forum’s three main hospitals — Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland — will change their tax- exempt status to become for-profit affiliates of CHS, the country’s largest publicly traded hospital company. CHS has more than 120 affiliates nationwide.
The Valley health-care system will keep its Forum Health name but become a subsidiary of CHS.
Under the terms of the company’s $120 million purchase of Forum finalized Friday, CHS has pledged to keep Forum’s three major hospitals open and make a capital investment of at least $80 million in the system over the next five years.
CHS will continue to provide charity care at Forum’s hospitals and participate in Medicare and Medicaid programs.
To oversee CHS’ new acquisition, the company has brought in two longtime executives to serve in Forum’s top positions.
David Fikse, vice president of operations at CHS’ corporate headquarters, will leave his post to step in as the new chief executive of the Forum system. He will also serve as the chief executive for Northside.
Cully Chapman has been appointed chief financial officer for Forum, as well as Northside Medi cal Center. Chapman will leave his position as vice president of finance for CHS’ Division V, which includes Ohio, Illinois, Indiana, Kentucky, Missouri, and West Virginia.
Immediate goals of CHS are “to stabilize operations” and start to build a strategic plan for “continuous success and improvement,” Fikse said.
“We believe there are some opportunities to make a difference fairly quickly,” Fikse said. “But we are going to look for some patience — hospitals in financial situations like this take time to improve.”
One of the company’s first steps will be to establish local boards of trustees at each of the hospitals, Fikse said. Vetting has begun for the 10- to 12-member boards, which will be comprised equally of physicians and community members, he said.
CHS is talking to members of the current Forum board, Fikse said, but is emphasizing the need for “a fresh start” after years of financial difficulties at Forum.
Apart from Fikse and Chapman, the executive leadership at Forum’s hospitals will remain largely the same.
Forum’s employees will be hired into the same positions at the same rate of pay, with years of service recognized, CHS said Friday. The company has reached agreements with the three unions representing more than 3,500 nurses and service workers at Forum.
The unions — the Ohio Nurses Association, the American Federation of State, County and Municipal Employees and the Service Employees International Union District 1199 — had early concerns that the for-profit takeover of Forum would affect quality of care at the hospitals, but ratified contracts with CHS in weeks leading up to the final transaction.
CHS is not responsible for Forum’s pension plan, which will be turned over to the Pension Benefit Guaranty Corp. The federal pension agency has started to take over the plan, and is expected to complete the process by the end of this year.
In the interim, Forum has sufficient assets to cover payments to retirees until the federal takeover.
With the transaction complete, Forum’s bankruptcy proceedings, which began in March 2009, will end.
The sale of the hospital system has been approved by U.S. Bankruptcy Court Judge Kay Woods and Ohio Attorney General Richard Cordray.
Woods and Cordray deemed CHS’ purchase price sufficient to cover Forum’s debts, ensuring the safety of the charitable foundations of Forum’s Western Reserve Care System and Trumbull Memorial. The foundations’ assets were pledged as collateral for Forum’s loans and, if needed, could have been used to pay creditors.
Youngstown Mayor Jay Willams expressed relief that the fate of Forum is secure.
“This is a significant step in the process of returning Forum as a viable health-care provider,” he said. “Their excellent quality of care can now be enhanced by financial stability.”
Warren Mayor Michael O’Brien echoed this sentiment. “ I’m glad there is some finality to this.”
years of uncertainty,” he said.