Mad River Hospital Signs Letter of Intent With Southwest Healthcare Services for Possible Acquisition
Press release from Mad River Community Hospital:
On May 20, 2023, the Board of Directors of Mad River Community Hospital (“Mad River”) approved a Non-Binding Letter of Intent with hospital management company Southwest Healthcare Services, LLC (“Southwest”), setting a general framework for Mad River to be acquired and, thereafter, operated as part of Southwest’s affiliated healthcare network. Over the course of the next 90 days, the parties will complete their mutual due diligence and work towards a definitive agreement. The parties expect to reach a definitive agreement, secure regulatory approvals, and implement the change of control in the Fall of 2023. During such period and through the transition, Mad River will remain open and continue to operate normally.
As part of the framework, Southwest has committed to (i) maintaining employee wages and benefits; (ii) maintaining physician contracts; (iii) maintaining existing services; and (iv) investing heavily in facility upgrades and service line expansions, including behavioral health.
“I am very excited to make this announcement today,” said Mad River Chairman and CEO Douglas Shaw, “My father built this hospital, and it has been my life’s passion to carry on his legacy. I am proud of Mad River’s 50-plus year heritage as a stand-alone hospital. However, as small rural hospitals continue to struggle financially in the aftermath of the COVID-19 pandemic, it has become clear that, to ensure Mad River’s long-term viability in this community, we need to partner with a proven healthcare management team that can navigate the current uncertainties in the economic climate for hospitals in California.”
“Southwest is the perfect fit at the perfect time,” said Shaw, “led by Precious Mayes, an executive who has won accolades for her leadership of critical access and safety net hospitals, Southwest will be operating a small but stable hospital network that shares Mad River’s values and culture. I look forward to the community getting to know her and her talented team over the weeks and months to come.”
Mr. Shaw emphasized that the choice of new management was driven by shared values and culture. “In recent decades, Mad River has been approached about potential acquisitions, but we have declined to give up our independence based on concerns that such a move would neither serve the needs of the community nor protect our devoted staff,” said Mr. Shaw. “However, we were attracted to this team because of its commitment to our staff and its track record with other hospitals in difficult circumstances.”
Southwest is a hospital management company that currently manages Pacifica of the Valley Hospital (“Pacifica”) in the San Fernando Valley and the Behavioral Health Urgent Care Center in Sylmar, CA. Southwest is currently working to open other hospitals following their closures by prior owners in order to serve the communities in which each is located.
“This strategic partnership presents an enormous opportunity to fulfill our mission of strengthening access to medical and mental health services” said Ms. Mayes. “ Ms. Mayes emphasized that the coming weeks and months will be devoted to getting to know the community in preparation for meeting its healthcare needs. “We are deeply humbled by the opportunity presented to us by Mad River’s leadership, and we are committed to earning the trust of the communities Mad River serves.”
Press inquiries to Mad River should be directed to [email protected]. Press inquiries to Ms. Mayes should be directed to: Diane Tsuruoka at [email protected].
FAQs
Why did Mad River choose to evaluate partnership options?
Healthcare is facing difficult times and stand-alone hospitals are vulnerable and challenged to continue in the current environment. The impact of the pandemic has exacerbated the already difficult operating environment, notably reductions in reimbursements and increased costs.
This is particularly the case for small, rural hospitals like Mad River. To ensure Mad River’s long-term viability and commitment to Humboldt County, we need to partner with a healthcare network that has the foundation to remain stable in an uncertain economic climate for hospitals in California.
This decision will secure the future of quality healthcare in our community, while retaining meaningful continued influence.
Why Southwest Health Care Services, LLC?
Mad River selected Southwest following an exhaustive and competitive process, in which leadership met with more than a half dozen organizations.
Ultimately, Southwest was selected because its philosophy, culture, and leadership best met Mad River’s objectives, and we felt they would be the best to carry forward Mad River’s legacy and values.
Southwest intends to manage Mad River directly or through a Southwest affiliate.
During the period of transition, will Mad River continue to operate?
Yes, Mad River will continue to operate under its existing ownership and management until the transition is complete and Southwest assumes management. Leadership from Mad River and Southwest are committed to a seamless transition for our patients, employees, and providers.
Who is Southwest Health Care Services, LLC and Precious Mayes?
Southwest Health Care Services, LLC is a hospital management company that has a long history of successfully assisting independent community hospitals. It presently manages Pacifica of the Valley Hospital in the San Fernando Valley and the Behavioral Health Urgent Care Center in Sylmar, CA. Southwest is currently working to open other hospitals following their closures by prior owners in order to serve the communities in which each is located.
Southwest is led by Chief Executive Officer Precious Mayes, who has 25-plus years of healthcare leadership experience. In 2019, Precious was presented with a congressional award given by Congressman Tony Cardenas, 29th Congressional District. Precious was recognized for her years of outstanding community service, advocacy, leadership and tireless involvement as CEO at Pacifica Hospital.
Additionally, Precious has received the prestigious San Fernando Valley Business Journal awards for “Business Executive of The Year”, and “Women in Business of the Year”. Precious was also listed in the “2019 Valley 200 Book” as one of the top 200 Influential Business Leaders in the San Fernando Valley. Precious was a nominee recipient 4 consecutive years for “Women in Healthcare” by LA Business Journal. She is an active member of the California Hospital Association (Leadership Committee), California Association of Healthcare Facilities, American Healthcare Association, United Hospital Association and National Center for Assisted Living.
Precious was featured on the cover story of Insight Success magazine as one of the “Most Admired Women Leaders in Business for 2020”. January 2021, The Boss Magazine featured Pacifica Hospital in a cover story article, “PACIFICA HOSPITAL OF THE VALLEY DELIVERS BEST-IN-CLASS PUBLIC HEALTH CARE.”
Without this partnership, would Mad River close?
No, Mad River is committed to its long-term presence and success in our community, with or without this partnership.
Will the name of the hospital change?
No name change expected.
When will the transition occur?
Mad River and Southwest anticipate that the change of control will occur at some point in the Fall of 2023.
Is the transition guaranteed to occur?
No. At this point, the parties have signed a Non-Binding Letter of Intent, which sets a framework for the transaction and is an aid to drafting a binding agreement. Under the Letter of Intent, the parties will continue their mutual due diligence and work towards the execution of a definitive agreement, which creates binding commitments.
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That’s the last step in the decay of Arcata:
They are selling the Hospital to a “Management Corporation”…
Enjoy life in beautiful Arcata!
I’m glad you moved away. Now if you would stop commenting because you have nothing good to say…..
” However, as small rural hospitals continue to struggle financially in the aftermath of the COVID-19 pandemic”
Nonsense, hospitals raked in billions during the great medical covid scam. American “health care” is a racket.
Mad River Hospital suffered from one of the worst management teams and probably the #2 worst HR departments in Humboldt County…
They actually laid off staff, during the pandemic…
They have the same openings, for years, just like other Community and District Hospitals, because they don’t “like” anybody…
“Health Care” is not a “scam”, but “Health Care” is an oxymoron, since nobody actually “cares” and because these facilities only exist to make money…
Successful healthcare companies spend so much time upselling and overprescribing expensive testing and unnecessary drugs, that “Healthcare” is a thing to avoid, not a thing to consume…
You have two choices, leave the area for better care, or endure whatever configuration the current corporation dispenses.
Often these management teams are themselves “fired”, like in the case of Tulare District Hospital, and Southern Inyo District Hospital, both of which brought in Professional Management Corporations, which were then dispensed with by Boards and locals in charge…
In an environment of high numbers of Medi-Cal and Medicare patients and over-regulation, it’s tough to make a profit, but these arrangements have been tried elsewhere with mixed results, like in Colusa and Willows…
Corporations are not better, but they usually have more assets to throw at problems, while the average user may not be happy with the result.
You live in the boonies, you take what you get, and remember, they don’t hire white men over 55, and the ladies in charge are usually affected by some church that you are not a member of…
The Attorney General kept Adventist Health out, but I expect that AH will eventually wheedle it’s way in, and it will be all downhill after that…
“You have two choices…”
There’s a third one: eat healthy, exercise often, don’t do drugs, don’t smoke anything, know you’re body, read up on home health remedies and treatments and avoid going to “health care facilities” or “health care providers” whenever possible.
Pretty telling when they are going to “invest heavily in behavioral health.” Be responsible for your own behavior. You don’t need some quack with a huge medical school tuition balance to pay to tell you you’re fucking up. Besides they’re just practicing anyway. I’d rather see someone who has perfected their craft.
There is a third choice. Vote for candidates at every level of government who will make a promise to vote for and advocate for MEDICARE4ALL.
I just listened to a story on NPR about a Swiss citizen who had an emergency apendectomy while visiting in the US. In Switzerland it would have been covered by their national inurance at an actual cost of around $8000. Here he received a bill for $42,000.
You are being gouged every day for every medical event in your life by our FOR PROFIT system. It’s a crime
As long as there is no religion involved, which around here severely limits what kind of care WOMEN have access to, it’s ok with me.
Exactly, reproductive rights and women’s health.
I don’t even know how a woman would feel comfortable going to a Catholic Hospital. I was taken to one in another city with an emergency and the damn flaming gay male nurse wanted to know “have you ever had an abortion?” I wasn’t there about miscarriage I was in an accident. Pissed me off so much I told the flaming gay man “I have a theraputic abortion every day and twice on Sunday.”
The Pope has said that Catholics should accept gay and transwomen in the church pews so I guess being a whole ass gay man nurse at a Catholic hospital is a-okay now. Not like he is going to be asked about if he had an abortion when he is there due to an accident.
What the hell does his sexual orientation have to do with his ability?
Either you are intentionally to be triggering or you have no idea how offensive your comment is.
Yeah dude, you really don’t understand that asking about abortion when I”m there for an accident is really SEXIST and MISGYNIST.
Yes, his ability to act like a douchebag was off the scale.
Please define “WOMEN”
Tracing who really owns a medical service company can be hard. In this case their website says “Southwest Healthcare is owned and operated by subsidiaries of Universal Health Services, Inc. (UHS), a King of Prussia, PA-based company, that is one of the largest healthcare management companies in the nation. Temecula Valley Day Surgery is majority owned by an affiliate. A+ Urgent Care Centers and Riverside Medical Clinic are physician owned independent groups, managed by an affiliate.”
Universal Health Services, Inc is a for profit business with shares sold on the New York Stock exchange. https://www.forbes.com/companies/universal-health-services/?list=global2000&sh=1309fcf02120
So is Southwest Healthcare a sort of McDonald’s like franchise that owns hospitals but runs them under Universal systems? IDK but dang, local control of medical services seems to be impossible these days.
Welp… there goes another one.
When a management company takes over, usually the first thing they do is raise rates to pay for their services.
Mad River has already cut their in home care unit. Though Mad River is for profit already, I do not see this as a good thing.
Health care is already so expensive. There are people only one illness away from losing everything to pay for medical care. Keep the care in health care.
Sounds like a big step foward:
Southwest will be “investing heavily in facility upgrades and service line expansions, including behavioral health.”
“it has become clear that, to ensure Mad River’s long-term viability in this community, we need to partner with a proven healthcare management team that can navigate the current uncertainties in the economic climate for hospitals in California.”
They have no choice. The California State mandated earthquake retrofitting requirements are probably what pushed Mad River over the edge. At least these people have the money to do it.
It sounds pretty good. Just hoping we don’t end up with a second version of Providence here.
I agree. I have traveled quite a distance to go to Mad River Community Hospital when needed and avoided Providence if possible. Well, MRCH had quite a run, didn’t it?
This could be the best thing to happen for the hospital or it could be its demise. Only time will tell. I don’t care for the term Management Corporation.
Remember, the anti-fraud legislations that make these places go broke, were the government’s response to all the fraudulent billing, and after the new laws, the “management corporations had to hire new lawyers to get around the new regulations and find new ways to pack services, overbill and get around the laws…
Round and round we go…
With any luck, Southwest Health Care Services has no connection whatsoever with anything akin to the worldwide institutionally-sanctioned pedophilia network built and operated by Providence’s Roman Catholic Church.
This is concerning.
It would seem that the reason for selling the hospital is for the buy out. The cash.
The CEO will walk away with a nice profit and will no longer have the headaches of running a business.
It is not clear that it will make the hospital any better.
Ambulances have an edict to take passengers to the nearest hospital.
From Willow Creek, that’s Mad River.
Even if we elect to go to St. Joe’s, the ambulance will go to Mad River.
There are horror stories about the Emergency Department at Mad River.
I went there in dire pain. A friend drove me.
After waiting for nine hours to be seen, we left.
I learned that, if one arrives by ambulance, they will take you right in.
The next day I went back via ambulance.
They figured out I had large kidney stones that were stuck and needed surgery to remove.
They told me that they do not have a urologist and I’d have to go to St. Joe’s.
They gave me a large dose of morphine, then sent me out into the night at 3:00am, completely drugged and with no transportation arranged.
That was only one instance. There were many.
Few from Willow Creek will voluntarily go to Mad River. It has such a bad reputation.
If selling it will turn it around, in terms of service, then that’s great.
I doubt it.
It would be better for the management to first clean up the endemic problems and see if it can regain its standing.
The money would probably solve itself if they provided an honorable service.