Hospital Board Forms Committee for Affiliation Study
January 9, 2008

Henderson Memorial Hospital is officially considering affiliation with another healthcare system.

The board of directors announced today that a community-based committee has been formed to study future affiliation options for the hospital.

"The board has always maintained that we need to routinely question what is best for the community’s health and how to maintain high quality services for residents on an ongoing basis," Ron Franks, chairman of the HMH board of directors, said.

Although HMH has chosen to affiliate with other systems in the past, there is a key difference in the hospital’s position at this time.

"The advantage we now have versus three years ago when we last considered a more formal affiliation is the fact that, financially, HMH is more stable," Franks said. "We can consider our options in a manner which should lead to the best possible outcome for the residents of Henderson and surrounding communities."

The committee’s first task will be to engage a consulting firm that specializes in transactions involving hospitals. Several consulting firms will be contacted, each with considerable experience in guiding hospitals through the strategic decision-making process associated with the questions of affiliation.

"These consultants assure that the hospital’s and community’s interests are best served through the arrangements being contemplated," hospital CEO Mark Leitner said. "The ultimate strategy could include sale or lease of the facility, a less formal affiliation agreement or a decision to maintain the independent status of HMH."

Recent trends show independent hospitals like HMH have increasingly sought the strength of affiliation to address the challenges faced in the current healthcare environment. A partnership with a larger system can provide benefits including better economies of scale, more efficient patient access to services and increased availability of capital funding.

"It is important to note that we are going into this process with a strategy but not a pre-disposition toward any of our options," Leitner said. "Our goal is to determine what is best for our hospital and community. Whether that is affiliation with a system or continuing our independence is the question this study will answer."

Many of the hospitals in East Texas and throughout the more rural areas of the state are already affiliated with larger systems such as East Texas Medical Center or Good Shepherd Medical Center.

Laird Memorial Hospital in Kilgore is being purchased by a specialty healthcare provider. As a result, the majority of the hospital’s services have been discontinued. Laird no longer offers acute inpatient, obstetrical, surgical or 24-hour emergency services.

"Our goal is to be proactive to ensure that the services currently provided at HMH are not only maintained but enhanced," Franks said. "The objective of this committee will be to determine the best means of accomplishing that goal."

The committee is comprised of local community leaders, many currently serving on the hospital’s board, along with several of the hospital’s medical staff members. The initial committee meeting was held January 8, and meetings will likely continue over the next several months.