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Donald Babb is retaining his position as executive director and CEO of CMH.
Donald Babb is retaining his position as executive director and CEO of CMH.

Little to change for CMH in CoxHealth merger

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In its fourth such purchase to date, CoxHealth signed a letter of intent to buy Citizens Memorial Healthcare in a deal valued at $120 million over seven years.

Up front, CoxHealth is paying CMH $40 million and putting $10 million toward a new foundation.

According to the terms of the deal, CMH will retain its name in a co-branded format with CoxHealth and CMH Executive Director and CEO Donald Babb will keep his position. The Bolivar health care system would have two seats on CoxHealth’s board. It is expected to close in mid-2017.

In a news conference held at the Bolivar hospital, CoxHealth CEO Steve Edwards said the foundation would commit $4 million back to the hospital and $1 million to scholarships for allied health care and other studies, with the rest to be used to support community heath advancement initiatives. CoxHealth is committing an additional $70 million over a seven-year period for capital projects and other needs.

Edwards and Babb said the partnership would be mutually beneficial, particularly as the Affordable Care Act puts added rules and costs on health care systems.

“This is not a distress call,” Babb said. “As you look at heath care changes we know are going to happen down the road, it means cuts for us. You try to look for a partner who can help you be stronger as you meet all those requirements.”

Through the deal, CoxHealth would add to its ranks CMH’s 1,990 employees, 91 providers and 360 volunteers. Edwards said all staff members would retain their jobs through the transition. CMH operates Citizens Memorial Hospital in Bolivar, Ellett Memorial Hospital in Appleton City, 32 primary and specialty care clinics, seven long-term care facilities, five independent living communities, an assisted living facility, a residential care facility and five ambulance stations. CoxHealth does not currently have assisted living and long-term care services, Edwards said.

CoxHealth currently employs over 10,600. Last year, CoxHealth recorded $1.27 billion in revenue, compared with CMH’s $406.9 million, according to Springfield Business Journal archives.

Edwards said the expanded scope would give both organizations better bargaining power.

“We are stronger when we can buy together,” he said. “We can get better discounting.”

Once a final agreement has been reached between CoxHealth and CMH, regulatory approvals would follow.

CoxHealth’s most recent purchase was Skaggs Regional Medical Center in 2013. In 1998, it bought the Springfield locations of Columbia HCA, and in 1993, it bought what was then known as St. Vincent’s Hospital in Monett and is now called Cox Monett.

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