Capella Health

Capella Healthcare announced today that it has finalized the sale of Parkway Medical Center in Decatur, AL, to Huntsville Hospital, effective January 1, 2012.

“We are proud of how Parkway has grown in the time that Capella has been a part of the community,” said Dan Slipkovich, Chief Executive Officer of Capella Healthcare. “Parkway’s employees and physicians deserve credit for achieving high marks in quality outcomes and patient satisfaction, despite the economic pressures that have weighed on hospitals nationwide. Together, we have taken care to the next level, adding new services and technology, recruiting new physicians and growing market share. We know that excellent care will continue under Huntsville Hospital’s leadership.”

“While this was a difficult decision, we feel it will help ensure the stability of high quality hospital care in Decatur for decades to come. Huntsville Hospital has a strong network in the region, including seven hospitals and numerous other facilities as well as an affiliation with Decatur General Hospital. With a long-established reputation for excellence, they are the best partner for Parkway in today’s environment.”

Huntsville Hospital and Parkway Medical Center have had a strong working relationship for many years, serving many of the same patients and even sharing some physicians. Both Huntsville Hospital and Capella Healthcare officials expressed confidence that this agreement is what is best for Parkway Medical Center because it can ensure a stronger, more collaborative healthcare system for Decatur and position Parkway for a bright future.

The transaction comes during a complex and transformative time in the healthcare industry, where the impact of national healthcare reform is driving hospitals and other healthcare providers to consolidate resources. Under reform, close collaborations will be rewarded, and every hospital will be challenged to do more with less.

Add to this that Alabama is one of the toughest reimbursement environments in the nation. In fact, effective January 1, Morgan County, Alabama will have the lowest Medicare wage index in the country. This means that hospitals in Morgan County will be paid the lowest in the nation to treat Medicare patients. It is clear that in the near future, healthcare providers must have considerable size – such as the network of hospitals and providers created by Huntsville Hospital – to survive and thrive in this state.

Parkway Medical Center is licensed for 120 beds and employs more than 300 people.  The hospital’s medical staff includes 139 physicians, many of whom also have privileges on the medical staff at Decatur General. Huntsville Hospital and its affiliate institutions represent more than 1,500 hospital beds, 9,000 employees and a thousand physicians across North Alabama.

About Capella Healthcare
 Capella Healthcare partners with communities to build strong local healthcare systems that are known for quality patient care. Based in Franklin, Tenn., Capella owns and/or operates 14 general acute-care hospitals in seven states. With the philosophy that all healthcare is local, Capella collaborates with each hospital’s medical staff, board and community leadership to take care to the next level. The company has access to significant leadership and financial resources, investing in its family of hospitals to strengthen and expand services and facilities.

Certain statements contained in this release may constitute forward-looking statements that involve risks and uncertainties.  These forward-looking statements include all statements that are not historical statements of fact and those statements regarding the company’s or management’s intent, belief or expectations.  Actual future events or results may differ materially from these statements. Readers are referred to the documents filed by Capella Healthcare, Inc. with the Securities and Exchange Commission, specifically the most recent filings which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including execution of growth, acquisition and business strategies. These and other applicable risks are summarized under the caption Risk Factors in Capella Healthcare’s Securities and Exchange Commission filings. We make no promise to update any forward-looking statement, whether as a result of changes in underlying factors, new information, future events or otherwise.