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Sale lets MediCorp focus on hospitals COMMONWEALTH CARE'S HOLDINGS
The sale of the Carriage Hill nursing home closes a chapter in the corporate history of MediCorp Health System
Date published: 7/18/2008
BY JIM HALL MediCorp Health System once had four long-term care facilities, offering everything from senior apartments to nursing home care. Now it has none. The sale of the Carriage Hill nursing home this week marked the end of the Fredericksburg company's long-term care business and a shift in corporate thinking. "We've learned we don't have to own everything. We're better off having the experts run it," said Fred M. Rankin III, MediCorp's president and chief executive officer. Since 2000, the parent company of Mary Washington Hospital has spun off four residential facilities, aimed primarily at the elderly. These include: The 2000 sale of its only assisted-living center, Commonwealth Assisted Living in Massaponax. The 2003 sale of one of its nursing homes, the Mary Washington Health Center in Colonial Beach. The 2005 sale of Chancellor's Village, a retirement community next door to Carriage Hill in Spotsylvania County. The sale price was $28.4 million. The sale this week of the 150-bed Carriage Hill home to two Roanoke companies, Commonwealth Care and Smith/Packett Med-Com. The sale price was $13.3 million. The sale gives MediCorp needed cash to run its flagship business, its Fredericksburg hospital, and its new businesses: a freestanding emergency room in Spotsylvania, three urgent-care centers in Stafford and Spotsylvania and a new hospital in Stafford. "If you look at other health systems, they're all doing the same thing. They're getting back to their core businesses," Rankin said. Indeed, the two companies that bought Carriage Hill have made similar purchases from other hospitals. Smith/Packett has purchased six nursing homes in recent years from Virginia hospital systems. The latest was Annaburg Manor in Manassas, which it bought in 2004 from the Prince William Health System. "Many hospital systems are doing that. The long-term care business is very tough," Bruce Hedrick, senior vice president of development for Smith/Packett. Commonwealth Care, Smith/Packett's partner in the Carriage Hill deal, purchased a nursing home from HCA Inc. in 2005, at its John Randolph Medical Center in Hopewell. "In some cases the facilities have become old and outdated and need to be updated," said Deborah Petrine, president of Commonwealth Care. Rankin said MediCorp officials concluded that the long-term care business was different from the hospital business, with its own regulations and funding, and special skills required of its workers. "It's not a variation of acute care. It's a different animal," Rankin said. Christopher Bailey, senior vice president for the Virginia Hospital and Healthcare Association, a state trade group, said all hospitals are under financial pressure to examine their businesses and see which ones fit with their core missions. "Some health systems find that core to include long-term care, others do not," Bailey said. "That's going to be entirely situational." One downside of these spinoffs is that control of the facility often shifts to a distant corporate office, said Valerie Hopson-Bell, owner of ElderCare Connections, a Fredericksburg consulting firm. "I've always believed that you're going to get better care when it's a local company," she said. "When it's local, you may be in a room next door to the parents of the folks who sit on the board." Jim Hall: 540/374-5433
Read more stories about Fredericksburg Date published: 7/18/2008
wonderful
(posted by
oldlady
, July 18, 2008 6:49 am)
I think its great that Medicorp can now focus on its Hospital and dump more money into hiring much needed staff. Congratulations!
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