IRMC and Cleveland Clinic Finalize Partnership
The intensive 18-month effort to secure Indian River Medical Center’s future neared its conclusion on October 3, 2018 as the IRMC Board of Directors and the Indian River County Hospital District Trustees voted to approve a series of agreements that will result in IRMC joining the Cleveland Clinical Studies system. Juniper Advisory is serving as Indian River’s advisor in this transaction.
Under the terms of the transaction, Cleveland Clinic is committing to invest at least $250 million in IRMC over the next 10 years.
“This is an extraordinary day in the history of our community,” said IRMC Board Chair Dr. Wayne Hockmeyer. “People across the country and across the world know that Cleveland Clinic stands for world class healthcare, and they will be partnering with the exceptional staff, physicians and nurses at IRMC to provide that level of care right here in Vero Beach for years to come.”
After a public meeting on Sept. 25 where advisors and legal teams shared the details of the agreements, board members and trustees took the last week to pore over those details and deliberate about their decision. In separate public meetings today, the IRMC Directors and IRCHD Trustees came to the same conclusion: the future of health care in Indian River County is with Cleveland Clinic.
“This has been a very long road, with countless hours of effort by not only our trustees and the IRMC board members but from people across our community,” said Hospital District Chair Marybeth Cunningham. “We can all be very proud of how transparently the process was conducted, and this terrific end result of that hard work.”
“We appreciate the commitment and dedication the Indian River board members and trustees have demonstrated as they sought the right partner,” said Tom Mihaljevic, M.D., CEO and President, Cleveland Clinic. “As healthcare continues to evolve this is a great opportunity for our organizations to come together and work in tandem to enhance access and advance healthcare today and in the future in Vero Beach.”
When finalized, IRMC and its affiliates will become part of the Cleveland Clinic health system, with the Cleveland Clinic having ultimate governing authority at IRMC. IRMC will continue to lease the hospital facilities and the land on which they stand under an amended and restated agreement with the Hospital District for a term of up to 75 years.
“Indian River Medical Center is an anchor institution and a true community asset,” said Wael Barsoum, M.D., CEO and President, Cleveland Clinic Florida. “We look forward to working closely with the leaders, physicians and staff to build on their great foundation of care and to strengthen support for indigent care.”
In addition to the $250 million investment commitment, the agreements outline that Cleveland Clinic will maintain maternity care (labor, delivery and obstetrics), in-patient well baby care/pediatrics and gynecology services, behavioral health/mental health services, inpatient and outpatient cardiovascular services, inpatient and outpatient cancer care services and gastroenterology services at IRMC for at least 10 years.
Also as part of the agreements, District support for indigent care at IRMC in general will phase out over three years after the transaction’s closing, while Cleveland Clinic’s charity care policy will go into effect on the first day. After the three years, Cleveland Clinic/ IRMC will assume responsibility for indigent care in general at the hospital. The District does, however, plan to continue support for the Partners program, which provides prenatal and post-partum care.
The transaction will close once filings and approvals required by governmental agencies are complete, and the expectation is that the agreements will be completed before the end of the year.
Juniper Advisory is acting as IRMC’s financial advisor during this strategic partnership process. IRMC’s ability to attract interest in a business combination from a number of exceptional hospital companies is a significant accomplishment for the hospital and its local communities. In particular, the selection of Cleveland Clinic by each board will ensure quality healthcare in the community for many years to come, and sustainability for Cleveland Clinic Florida as it grows its system in the state.