Crossville Chronicle, Crossville, TN

June 28, 2013

CMC, Covenant merger progresses

By Heather Mullinix
Assistant editor

— Discussions between Cumberland Medical Center and health care giant Covenant Health for a merger have progressed, with the CMC board of directors approving a non-binding letter of intent.

Ed Anderson, CEO of CMC, said, "We are dedicated to following what Dr. May Wharton wanted for this community, which was access to health care. Given the current environment, we felt like we would better serve our patients, maintain a good hospital and provide services to our community."

Anderson noted the health care industry was in a tenuous environment, with many new regulations and new reimbursements. The board had been considering options to become part of a larger health care system to increase its ability to negotiate with suppliers and with insurance companies, and to provide access to expertise not currently available in the community.

Covenant Health had something else the board liked. It is a community-owned health care system.

"The hospital is committed to maintaining its not-for-profit status, and Covenant Health's philosophically aligned with Cumberland Medical Center, which was crucial in the board's choice of a partner," Anderson added.

Anthony L. Spezia, Covenant Health president and CEO, said, "Cumberland Medical Center is committed to excellence and dedicated to improving health, wellness and quality of life in the community. That commitment complements Covenant Health’s mission of improving the quality of life through better health.

“We are already partnering with Cumberland Medical Center in a number of ways to provide healthcare services to the people of Crossville and the surrounding area, and we look forward to the next steps in formalizing the relationship between our organizations.”

The letter of intent, which was effective June 24, means both parties have agreed to specific terms relative to the services provided at CMC and the benefits Covenant Health will bring to the hospital and the community. The next step towards a merger includes a definitive agreement and the plan being approved by state and federal authorities. It is believed the transaction can be completed by the end of the year.

"Our goal is to have all of the necessary commitments made by the end of the year and then become a member of the Covenant Health organization," Anderson said.

CMC announced it was studying a possible merger with Knoxville-based Covenant Health last fall, stating at that time, "The CMC board has a commitment to provide quality healthcare services to the residents of Cumberland County. This strategy requires access to capital markets in order to meet the needs of technology requirements and infrastructure upgrades."

Covenant Health includes eight care hospitals in East Tennessee and numerous member organizations, including the Patricia Neal Rehabilitation Center, Thompson Cancer Survival Center, Peninsula, Fort Sanders West Diagnostic Center, Covenant Medical Management Inc., and Covenant HomeCare. For several years, Covenant Health has been named among the top 100 integrated health systems in the county by IMS, a national healthcare information and data analysis organization, for exceptional clinical quality, access to services, information technology, financial stability, physicians and leadership.

The healthcare system employs more than 10,000 people through Covenant Health and its member organizations, and works with more than 1,000 affiliated physicians.

CMC is a non-profit regional medical center licensed for 189 beds. It is also among the largest employer in the county, with about 95 physicians working with the more than 800 employees. In addition to the hospital at 421 S. Main St., the hospital also operates two wellness centers, the Hyperbaric Medicine and Wound Center, a medical equipment service and other specialty medical care.

CMC already partners with Covenant in a number of ways, particularly the Thompson Cancer Survival Center, which manages the CMC Regional Cancer Center, and has been working with Covenant on the development of an interventional cardiology program in Crossville.