Easton Hospital is changing hands.
An agreement announced Thursday will see the Lehigh Valley facility and its assets — along with seven other hospitals in three states — acquired by Steward Health Care LLC.
The physician-led Steward operates nine hospitals in eastern Massachusetts, along with Steward Medical Group and Steward Health Care Network, totaling about 3,800 physicians, according to a news release.
Steward plans to offer jobs to all employees in good standing and continue privileges for medical staff, officials said.
With about 1,000 employees, 196-bed Easton Hospital is Wilson Borough’s largest employer.
The transaction is expected to close in the second quarter of 2017, pending approvals.
The pending ownership change does not come by surprise. Rumors swirled last fall that Tennessee-based Community Health Systems, the publicly traded for-profit company that has owned Easton since 2001, was exploring a possible sale.
Easton Mayor Sal Panto Jr., who serves on the hospital’s advisory board, said he saw the sale as a positive development.
“I don’t think this is a surprise to anyone and we’re hoping Steward can give us the direction and assistance we need,” he said, adding he only learned of the sale Thursday afternoon.
“Easton Hospital has made a number of capital improvements and we’ve had a very good round of specialists and surgeons recruited in the last 18 months. I think the hospital was headed in the right direction and we can work with Steward, and they’ll really see the value of a community hospital.”
The other CHS hospitals involved in the deal announced Thursday are the 258-bed Sharon Regional Health System in Sharon, Pa.; 119-bed Wuesthoff Health System-Melbourne in Melbourne, Fla.; 298-bed Wuesthoff Health System-Rockledge in Rockledge, Fla.; 154-bed Sebastian River Medical Center in Sebastian, Fla.; and ValleyCare Health System of Ohio, with 355-bed Northside Medical Center in Youngstown, 311-bed Trumbull Memorial Hospital and 69-bed Hillside Rehabilitation Hospital in Warren.
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Under CHS, Easton Hospital has seen tens of millions of dollars in expansion investments, fights against several high-profile lawsuits, frequent changes in local leadership and efforts to expand its footprint in the Lehigh Valley.
It competes in a market dominated by two big players — St. Luke’s University Health Network and Lehigh Valley Health Network. In 2011, CHS lost out on a bid to acquire then-Warren Hospital in Phillipsburg. That hospital would later merge with St. Luke’s.
In a Bloomberg report last fall, analysts said that CHS would likely have trouble finding a buyer because of its debt load. The company said Thursday that it will use money from the sale to pay down debt.
“This transaction is a significant step in our strategic work to optimize our portfolio and operations for the future,” Wayne T. Smith, CHS chairman and chief executive officer, said in a prepared statement. “These hospitals play an important role in their communities and can benefit from Steward Health Care’s community-based care model going forward.”
In December, Easton Hospital CEO John Zidansek resigned. He had led the facility since 2013. At the time, hospital officials did not elaborate on the circumstances behind his departure.
In Thursday’s news release, hospital officials said Damon Brown had been appointed interim chief executive officer in January.
“Steward Health Care will help us maintain our position as a key institution and employer in the community,” Brown said in a statement.
Michael Callum, Steward’s executive vice president for physician services, promised to continue a “strong community focus” and a smooth transition for patients and staff.
Easton Hospital celebrated its 125th anniversary in 2015. It opened with 11 beds in Easton in 1890 and moved in 1930 to Wilson Borough, where it has been a community fixture.
Tony Verenna, borough council president in Wilson, said he had only learned of the sale Thursday afternoon and wasn’t clear what impact, if any, it might have on the borough.
He said Wilson relies heavily on tax revenues from hospital buildings and operations. Any change in that could have significant impacts on the borough, which this year enacted a 13 percent borough property tax increase.
“It could really affect us, especially after the problems we had this year,” he said.
Panto said he was relieved to see that the buyer is a for-profit entity, because a nonprofit hospital doesn’t pay property taxes. Such a change could cripple Wilson Borough, which collects property and other taxes from CHS.
Easton Hospital was a nonprofit hospital until its acquisition by CHS in 2001.
“Everyone, especially older people like me, really attach themselves to the community hospital,” said Panto, who was an Easton Hospital patient last year. “The staff and the medical team there are very talented.
“Easton Hospital has been a fixture in Wilson Borough and in the city for a long time. I think all in all the hospital will do well.”
Steve Novak may be reached at snovak@njadvancemedia.com. Follow him on Twitter @type2supernovak and Facebook. Find lehighvalleylive.com on Facebook.
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