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| Reprinted with permission, October 31, 1995 |
by JUD MAGRIN
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| Shands sets deadline for hospital
purchases |
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If AvMed-SantaFe doesn’t take Shands Hospital’s latest
offer to buy Alachua General Hospital and five other area hospitals by
Thursday, the deal is off, Shands’ top negotiator said Monday.
Meanwhile, negotiators for AvMed-SantaFe have reopened talks with health
care giant Columbia/HCA for the sale of AGH and other assets, said Josh
Nemzoff, lead negotiator for Shands Hospital. Columbia/HCA owns North
Florida Regional Medical Center in Gainesville.
The Shands Hospital board of directors signed off on a final offer last
week, Nemzoff said, and it was sent to AvMed-SantaFe.
“If they do not sign it, the deal is off,” Nemzoff said. He said “they know
what the deal is, and after 5½ months, it’s time to go forward or part
company.” Nemzoff said the deadline is Thursday.
A lawyer for AvMed-SantaFe didn’t look at the proposal with the same
urgency.
The AvMed-SantaFe regularly scheduled board meeting is Wednesday. Corporate
counsel Steve deMontmollin said Monday that the meeting isn’t being
specially held for the offer.
“We’re considering it right now,” deMontmollin said. “That (the deadline)
may be their view. We will consider the agreement and make a response.”
deMontmollin said he did not know if AvMed-SantaFe reopened talks with
Columbia/HCA but said he “wouldn’t be surprised.”
“What we’re saying is we received an offer, and as soon as we can work
through the terms and conditions and make a response, we will,”
deMontmonllin said.
McManis & Associates of Washington, D.C., is the lead negotiator for
AvMed-SantaFe, but the firm did not return phone calls Monday.
In addition to buying Alachua General, Shands is trying to buy Bradford
Hospital in Starke, Suwannee Hospital in Live Oak, Lake Shore Hospital in
Lake City, and UpReach and Vista Pavilion in Gainesville – all part of
AvMed-SantaFe.
But it is AvMed-SantaFe’s insurance company and health maintenance
organization that are the company’s crown jewels, and it became clear that
AvMed-SantaFe was at cross purposes. While the HMO worked to keep people out
of hospitals and guided them to primary-care doctors, AGH and the other
hospitals struggled with their daily counts.
It was inevitable that in Gainesville, with the onslaught of health care
reform, that either Shands, North Florida Regional or AGH had to close or
change direction, health care experts have said. It wasn’t going to be
Shands, a premier teaching hospital in the Southeast, or North Florida
Regional Medical Center, a private hospital profitable for Columbia/HCA.
AGH’s standing wasn’t good, though AvMed-SantaFe made strides to get it into
the black.
Earlier this year, AvMed-SantaFe began talks with Columbia/HCA and Shands
for the purchase of AGH and other assets. Shands won the nod and signed a
letter of intent July 11 to conduct due diligence.
At the time, there was a possibility that Columbia/HCA would buy AGH and
close it to boost its North Florida Regional operation. One other factor was
in Shands’ favor: Federal Trade Commission anti-trust considerations.
The letter of intent expired, letting AvMed-SantaFe resume talks with
Columbia/HCA.
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