Skip to content

Morrow County Hospital Enters into Strategic Affiliation with OhioHealth

FocalPoint principals advise Morrow County Hospital on a partnership to preserve and support physician assets and hospital and healthcare operations.

“Our healthcare investment banking practice identifies strategic transactions to ensure financial viability of hospitals and healthcare providers during challenging times."

Hector Torres, Managing Director

Transaction

Morrow County Hospital (MCH), a critical access hospital based in Mt. Gilead, Ohio, has transferred its physician enterprise to, and entered into an affiliation with, Ohio Health, a not-for-profit system of hospitals, ambulatory sites, hospice, home health, medical equipment, and other health services spanning 47 Ohio counties. MCH has been providing services to a community of approximately 35,000 Morrow County residents since 1952.  Due to declining patient populations and a deteriorating financial position, FocalPoint principals* were hired by MCH to explore strategic alternatives. In analyzing a select group of not-for-profit suitors, MCH decided to explore a mutually-beneficial partnership with OhioHealth.

Deal Challenges

MCH is a key asset and provider of clinical services to the local community. However, in recent years the hospital had experienced declining patient volumes and needed to cut service offerings due to a difficult competitive market. MCH faced competition from larger health systems, all within a 15 to 30 mile radius. As a result, approximately 82% of county residents migrated to providers outside the county. The hospital found it difficult to recruit primary and specialty care physicians to adequately meet the demand for services. As a result, MCH experienced a deteriorating financial position and lacked the resources to strategically invest in services and physical plant infrastructure. FocalPoint principals needed to identify not-for-profit suitors who had strong strategic and financial rationale for partnering with MCH.

Solution

FocalPoint principals* identified a select group of not-for-profit suitors and ultimately advised MCH in a strategic affiliation with OhioHealth. As a key element of the transaction, OhioHealth committed to purchase the physician assets of MCH, as well as to continue to invest in the physician enterprise via technology and related clinical infrastructure enhancements. In addition, OhioHealth committed to keep the hospital open for as long as MCH’s Board of Trustees deems the hospital financially viable. In the circumstance that the Board elects to close the hospital, OhioHealth committed to build an outpatient ambulatory surgery center that will deliver the appropriate clinical services needed by the residents of Morrow County. Under the agreement announced in May 2019, OhioHealth will also continue its management services agreement with MCH.

*FocalPoint principals’ executed transaction at a prior firm.