Capella Healthcare CEO Dan Slipkovich (L) and Saint Thomas Health President & CEO Dr. Mike Schatzlein, announce a joint venture for the delivery of healthcare in Middle Tennessee and Southern Kentucky during a December news conference.

The pending partnership will result in the joint ownership and operation of Franklin-based Capella Healthcare’s four Middle Tennessee hospitals — River Park in McMinnville, White County Community Hospital in Sparta, Stones River in Woodbury and DeKalb Community Hospital in Smithville. Capella will be the managing member and majority partner under the agreement.

STHe — part of the nation’s largest non-profit healthcare system, Catholic-affiliated Ascension Health Ministry — will hold an equity interest, develop and strengthen service lines, and become the tertiary care partner for the hospitals in the new venture. Additionally, the LOI calls for Capella and STHe to be exclusive hospital development partners in the region once the definitive agreement is signed.

“Partnering with Saint Thomas Health, which is nationally recognized for its quality of care and innovative strategy, positions our Middle Tennessee hospitals for greater success as we seek to further expand services,” Dan Slipkovich, CEO of Capella Healthcare, said at the December announcement. “This venture also provides a significant opportunity for Capella and Saint Thomas Health to jointly partner with additional hospitals that recognize the value of these kinds of partnerships, especially as accountable care and health reform continue to evolve.”

Calling it a “landmark partnership,” Mike Schatzlein, MD, STHe president and CEO, said, “We are partnering with Capella Healthcare and the outstanding physicians in the communities of their Middle Tennessee hospitals to expand and enhance services.” He added STHe would provide support for the expansion of cardiac, neurosciences and other specialty services. In addition, he said the partnership allowed all involved parties to collaborate on strategies for the use of innovative technology and clinical integration.

“We really see the need for fundamental, transformational change in healthcare,” he continued. “It’s important for us to develop a regional, integrated delivery system, and this is an important step in doing that.”

The Capella joint venture is the latest in a series of announcements by STHe regarding unique partnerships and expanded presence in the region. Late last summer, the health system announced the development of MissionPoint Health Partners, which launches this month. “In looking at the healthcare landscape, we have recognized that fundamental change is required,” Schatzlein said of the impetus behind these moves. “It is our desire to be on the forefront of this change through innovative relationships. In a world of change or be changed, we’re opting for change.”

According to corporate leadership, the partnership between Capella and STHe also enhances each company’s mission and core philosophy. “Our two organizations share a commitment to providing the highest quality of care for the individuals and communities we serve, and (we) look forward to leveraging our strengths to expand our services,” Slipkovich said.

Schatzlein concluded, “We want to provide holistic, reverent care and improve the health of communities while doing so. In working with Capella Healthcare in the communities they serve, we become part of a greater effort to keep excellent healthcare affordable and accessible.”

Pending additional negotiations, due diligence, the execution of the definitive agreement and other customary closing conditions, the partnership is anticipated to begin operations on or before March 1.

Capella Healthcare operates 15 acute care hospitals in seven states. Saint Thomas Health, which employees 6,500 associates, incudes five Middle Tennessee hospitals — Saint Thomas, Baptist and The Hospital for Spinal Surgery in Nashville, Middle Tennessee Medical Center in Murfreesboro, and Hickman Community Hospital in Centerville. Additionally, STHe has a network of affiliated joint ventures in diagnostics, cardiac services, ambulatory surgery centers, medical practices, clinics, and rehabilitation facilities.

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