Transition could take up to a year

Published 12:00 am Tuesday, September 27, 2005

Obici Hospital – Amedeo Obici’s final gift to Suffolk residents and one of the few remaining independent hospitals in the region – is merging with Sentara Healthcare of Norfolk.

The boards of directors of Obici Hospital, established by the Planters Peanut magnate who lived in Suffolk until his death in the late 1940s, and Sentara on Monday announced the signing of a letter of intent to merge the two organizations.

It could take up to a year for the merger to be approved by state and federal regulatory agencies, said J. Samuel Glasscock, chairman of Obici’s board of directors. The plan also calls for Sentara to assume all of Obici’s outstanding debt.

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We will continue to have a full-fledged, full-service community hospital,&uot; said Glasscock. &uot;The same services we now offer will continue to be available and additional ones will be provided.&uot;

Merger talks began last fall after officials from the two hospitals met to discuss mutual healthcare challenges: low reimbursements from Medicare and Medicaid, charity care, purchasing costs and the like, Glasscock said.

Those conversations, coupled with the fact that nearly 500 independent hospitals have been forced to close in recent years, was a clear indicator that the hospital eventually would need to become part of a larger corporation, Glasscock said.

&uot;The medical field has grown more complex and…independent hospitals have had a tough time keeping up with changes,&uot; he said. &uot;In the long range, we knew Obici had to have a connection with a (healthcare) system.

&uot;They have the expertise and resources to do things that smaller, independent hospitals can’t afford to do.&uot;

Obici, in recent years, has fended off other advances from several other interested healthcare companies, Glasscock said.

&uot;We were looking for a non-profit, well-run organization,&uot; he said. &uot;We quickly realized that Sentara was the organization we wanted to affiliate with.&uot;

After the merger, the Obici Foundation, established to oversee use of the money that Obici left to build the hospital, will continue working to make quality healthcare available for all Suffolk residents.

The foundation, which is now set up under the auspices of the hospital, will become an independent non-profit, Glasscock said. Money left through the organization’s perpetual fund has historically gone directly to the hospital to cover equipment purchases or building expenses, he said.

As part of the merger agreement, Sentara will make a substantial one-time contribution to the Obici Foundation, Glasscock said. He declined to say how much. In turn, the foundation’s mission will expand to focus on community service, he said.

For example, he said, the foundation might open a free clinic, help buy costly prescription drugs for the indigent, or fund a diabetic care clinic within Obici’s existing service area.

Obici’s administrative team met with hospital managers on Monday, who shared information about the proposed merger with their employees. The hospital will be holding employee meetings over the next few days to answer questions, Glasscock added.

The transition will be relatively seamless for patients and the hospital’s 1,000 or so employees, Glasscock said.

Employees don’t need to worry about their jobs, stressed Glasscock and Howard Kern, president of Sentara Healthcare.

&uot;We have tried to work out arrangements to protect employees’ jobs to the extent

possible,&uot; Glasscock said. In fact, he added, the merger could open doors for people interested in transferring to other healthcare facilities.

&uot;There will be no layoffs,&uot; said Kern. &uot;Sentara has a long history of never having had layoffs…and we pride ourselves on that.&uot;

Although most staff members will continue in their present positions, a few may be asked to transfer into different roles, he said.

Obici already has a strong quality of care level, he added.

&uot;There will be no significant changes of any kind,&uot; Kern said. &uot;Our effort will be on providing the support we can to management.&uot;

Sentara, which owns six hospitals in the Hampton Roads and Williamsburg communities, can make Obici more efficient in how they purchase supplies and capital equipment.

&uot;We are able to negotiate better deals that single stand-alone hospitals can,&uot; Kern said.

Obici’s board of directors will continue to have some participation in the operation of the merged facility, at least for while, Glasscock said.

An advisory board will be in place for five years after the merger is finalized, he said. Some current hospital board members will probably be named to the foundation’s board.

Also, two people will be tapped to serve on Sentara Healthcare’s board of directors and four to the company’s board of trustees.

Glasscock is confident that Mr. Obici would approve of the board’s decision to merge.

&uot;Mr. Obici was a good businessman and he was interested in providing quality healthcare to the citizens of Suffolk,&uot; Glasscock said. &uot;I think if he were here and could look at the facts we have seen, he would make the same decision we did.&uot;