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Berger To Explore Not-For-Profit Conversion

Circleville, OH – Feb. 20, 2008 – The Berger Health System Board of Governors officially requested that Circleville City Council and Pickaway County Commissioners join them in a “due diligence” process to evaluate the potential of converting Berger Hospital from a public entity to a not-for-profit corporation serving the needs of the residents of Pickaway County.

Berger is currently one of 17 remaining hospitals who are public in nature. At one time almost half of Ohio’s 180 hospitals were public entities, but have since converted to not-for-profit status. Berger’s “public” status means that it is a governmental entity operating under the Ohio Revised Code, Chapter 749, and is jointly controlled by the City of Circleville and Pickaway County.

Berger President Larry Thornhill said, “It is becoming more and more difficult for Berger to compete with other central Ohio hospitals, most of which are not-for-profit entities. Although we have been very successful in the past both in growth and financial strength, we continue to be saddled with the very restrictive language of the Ohio Revised Code. This prevents us from common business practices currently incorporated by other competitors.”

“For example, in many cases Berger is unable to enter into joint venture agreements with physicians and other hospitals to create new services for area residents,” Thornhill added. “This sometimes results in Berger competing with local physicians and healthcare entities, resulting in duplication of services. Both Adena Hospital in Chillicothe and Fairfield Medical Center in Lancaster were previously governmental entities. Both converted and have been very successful in growth and operations since their conversion.”

“One need only to listen to national news or read local newspapers to know that healthcare is one of the top issues facing America today, both from a cost perspective and availability to all. Undoubtedly there will be major changes which will be mandated to address these growing concerns, and all healthcare facilities will have to adapt if they intend to remain competitive and financially viable. It is because of this forward thinking on behalf of the Berger Board of Governors, that the issue is being raised in a proactive manner versus reactive.”

“There will be some who will liken this to the attempted merger in 1999,” Thornhill said. “The two scenarios are completely different. In 1999, had the merger been approved, healthcare would not have been controlled locally, and Berger Health System would no longer have been an independent hospital. The study being conducted currently, if approved, still retains the hospital as a public asset which will continue to grow, create jobs and return what is currently around $40 million per year back to the county in the form of economic impact.”

Thornhill said the Berger Board of Governors will continue to be comprised of citizens from the county, focused on maintaining a viable, progressive health system. “The health system would still be an asset controlled by those who make up the community of Pickaway County. Equally important, if a conversion would be made, it would be transparent to the people who receive inpatient and outpatient care at Berger.”

Thornhill emphasized, “No decision has been made. This is a significant strategic issue. I believe the outcome of this decision will impact the future direction of Berger Health System for decades to come. Because of the magnitude of this decision, each issue, large and small, must be thoroughly considered and discussed. In my estimation, such an in-depth evaluation will at a minimum take several months if not longer, before a conclusion may be reached.”