Today's the day: Asheville's Mission Health, HCA Healthcare finalize $1.5B deal

ASHEVILLE — Tennessee-based hospital giant HCA Healthcare finalized its acquisition of Asheville's Mission Health system on Friday, ending roughly a year of negotiations with a $1.5 billion deal that could have far-reaching impacts on the future of health care in Western North Carolina.

The deal now places Mission's six-hospital system and its nearly 12,000 employees under the umbrella of HCA, a for-profit conglomerate headquartered in Nashville. It marks a significant shift for the formerly not-for-profit Mission, a hospital system that traces its roots to 1885 when the first Mission Hospital was launched to heal the sick in a five-room Asheville home.

"The team at Mission Health has been nationally recognized for providing high-quality patient care, and we’re excited that they’ve joined HCA Healthcare," Sam Hazen, CEO of HCA Healthcare said Friday. "We’re looking forward to investing in Western North Carolina and helping ensure Mission Health’s 133-year tradition of caring for communities throughout the region continues for many years."

In a statement, Mission CEO Dr. Ron Paulus said the hospital is "very pleased" the deal has closed so Mission now can "focus on caring for the people of western North Carolina. 

"This is a tremendous win for the people and communities that we serve, and one that may be judged by history as a positive inflection point for the communities we serve," Paulus said. 

A Mission spokeswoman declined to make any of its senior leaders — including Paulus and board chair Dr. John Ball — available this week to discuss impacts of the deal.

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Under terms of the agreement, HCA will build a 120-bed inpatient behavioral health hospital in Asheville; it plans to complete the 12-story Mission Hospital for Advanced Medicine and will build a replacement hospital for Angel Medical Center in Franklin; and it is expected to invest $232 million into Mission's existing facilities.

The final asset purchase agreement is posted below in its entirety.

The acquisition cleared its final regulatory hurdle last month following a review completed by the state's Department of Justice headed by Attorney General Josh Stein. Stein said he would allow the deal to go through without a legal challenge after his office negotiated a series of new protections into the asset purchase agreement designed to safeguard the public.

Those changes include doubling the time period HCA must provide certain services at Mission's rural hospitals in Brevard, Franklin, Highlands, Marion and Spruce Pine from five years to 10 years.

It also mandates appointing an outside "independent monitor" to ensure HCA upholds terms of the deal.

State regulators were tasked in their review with determining whether the purchase price was fair and whether the agreement provides adequate protections for residents and Mission's health care services. Additionally, they examined the composition of the board of Dogwood Health Trust, a subject of criticism for some citing the lack of racial, gender and geographic diversity among its initial members.

Much of the proceeds from the deal go to Dogwood, a private, nonprofit successor foundation often billed by Mission leaders as the crown jewel of the of the sale. 

Dogwood board Chair Janice Brumit has said the foundation — expected to spend some $50 million annually, or more — tasks itself with improving the health of Western North Carolina residents by addressing social determinants of health. It is a broad category spanning from economic stability to education to housing to availability of places to exercise — all of which impact people's health.

The foundation will serve an 18-county region in Western North Carolina. It is not expected to issue its first grants until at least 2020.

"From early on, we were confident that HCA Healthcare shares Mission Health’s focus on high-quality, patient-centered care and is the right and best choice to help ensure our continued success," Ball, who also is a member of the Dogwood board, was quoted as saying in a news release. 

"We are excited to see how the resources, scale and expertise of HCA Healthcare can help enhance Mission Health’s rich legacy," he said.

HCA also has agreed to create a $25 million innovation fund focusing on improving "healthcare service delivery and spurring economic development" and will have Mission's system adopt its "more expansive" charity care policy.