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March 27, 2008

Update: State reviews pending sale of rehab hospital

NORTH SMITHFIELD -- Landmark Medical Center is seeking state permission to sell control of its rehabilitation hospital here to a for-profit St. Louis-based company.

Currently, the 82-bed rehabilitation center on Eddie Dowling highway near the Woonsocket line is owned by Landmark Medical Center and its corporate parent, Landmark Health Systems. Landmark wants to sell 80 percent of the operation to a new corporate entity that will be 80 percent owned by RehabCare Hospital Holdings LLC of St. Louis. Mo.

According to documents filed with the state Department of Health, the new owners will reduce the number of beds at the hospital from 82 to 41. Landmark spokesman bill Fischer said that the average patient population at the rehabilitation hospital averages 25 to 30 patients, so the loss of beds is not seen as requiring a reduction of staff or services offered to northern Rhode island area.

Fischer said RehabCare specializes in the type of rehabilitation medicine practiced at the center. Those services were a side business for Landmark, he said. The sale of the hospital would enable Landmark get an infusion of cash and put the operation in the hands of someone who knows that business better than landmark does,.

“We believe this is going to give us the opportunity to augment and grow that business,” he said.

RehabCare officials could not be reached for comment.

The company specializes in providing rehabilitation management services in hospitals, nursing homes and other out-patient facilities. In its 2006 annual report, the company claimed 16,500 employees working in facilities in 87 markets throughout the United States. The company cited operating earnings of $21 million on revenues of $615 million.

The final price has not yet been set, Fischer said.

-- Journal staff writer John Hill

Under state law, the sale must be reviewed and approved by the Attorney General’s office and the state Health Department. The Health Department must examine the proposed sale to make sure it protects the public health and welfare, while the attorney general is charged with guarding the new entity’s charitable assets and gains from money that has been donated to the institution in the past and to make sure there are no conflicts of interest amongst the new owners.

The review process is complex and can take up to six months. Now that documents have been filed, the health department and attorney general’s office must determine if they application is complete. If it is found lacking, the applicants will get 30 days to complete it. Once it has been certified as complete, the state has p to six months to review it. Part of that review process will be a public meeting.

“Public input will be very important given that the sale involves an out-of-state for-profit entity buying an in-state hospital,” the Health Department and the attorney general said in a joint statement.

Originally known as the Fogarty Unit, Landmark has owned the 116 Eddie Dowling Highway facility since a merger in 1988. Landmark uses it as the site of its occupational health department and open-design Magnetic Resonance Imaging nit.

Posted by Mike McKinney at 4:24 PM | Permalink

March 27, 2008

Update: State reviews pending sale of rehab hospital

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