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Saint Joseph Mercy Health System (SJMHS) and Trinity Health announced today that they have entered into a definitive agreement under which Prime Healthcare Services, a hospital system based in Ontario, Calif., would acquire St. Joseph Mercy Port Huron, located in Port Huron, Mich. The decision of the SJMHS board of directors was supported by the hospital’s local board.

“We are excited to acquire St. Joseph Mercy Port Huron and look forward to enhancing its services to the Port Huron community,” said Prem Reddy, M.D., FACC, FCCP, chairman, president and CEO of the for-profit Prime Healthcare Services. “We are committed to making hospitals successful by strengthening, building, investing and improving their programs and facilities.”

SJMHS and Trinity Health, following an extensive due diligence process which included a thorough assessment of strategic, financial and regulatory issues as well as a mission discernment, concluded that the sale of the hospital and its assets to Prime Healthcare Services was in the best interest of the colleagues, patients and communities being served.

Under the conditions of the agreement, Prime Healthcare has agreed to invest $20 million in capital improvements to the hospital and its operations over a three-year period. Dr. Reddy confirmed that the capital investments will include a Tru Beam Linear Accelerator, subject to Certificate of Need (CON) approval.

Prime Healthcare has committed to adopting a charity care policy that is just as favorable as the current charity policy in effect and will continue to provide treatment for indigent patients and programs that support the community, specifically including The Peoples’ Clinic for Better Health, an indigent care clinic operated by the hospital in conjunction with the St. Clair County Medical Society.

Over the past several years SJMHS and Trinity Health have been developing a highly integrated care delivery system in southeast Michigan. However, St. Joseph Mercy Port Huron’s distance from other SJMHS hospitals and outpatient centers have challenged the ability of SJMHS to integrate operations and prepare for population health management in the best interest of the community.

“When Prime Healthcare expressed an interest in the hospital earlier this year, we determined that both parties shared a common vision for the future of the hospital’s healing mission that is in the best interest of its patients and employees,” said Garry C. Faja, regional president and CEO, SJMHS. “We received the assurances we needed to feel confident that Prime Healthcare could and would continue serving the health care needs of the community. Prime Healthcare has a successful track record of sustaining and advancing access to quality health care services among its acquired hospitals.”

Prime Healthcare fully recognizes the importance of preserving the hospital as an acute care hospital with an open and accessible emergency department. Prime Healthcare also will maintain an independent medical staff and local governing board.

“Prime Healthcare’s investment in our community will serve to open a new and exciting chapter in our hospital’s history,” said Rebekah Smith, president and CEO, St. Joseph Mercy Port Huron. “Our affiliation will enable our hospital and staff to continue to provide state-of-the-art health care to our patients and community for the future. We are confident the hospital will be well positioned for decades to come as a result of this transaction.”

The transaction is expected to close upon completion of all due diligence and receipt of necessary regulatory and legal approvals.