MWHC wants to remain independent, says company president, CEO
BY JIM HALL
A new version of the rumor seems to arrive with the change of seasons.
In summer, the word was, “Have you heard anything about Mary Washington being sold to Sentara?”
By fall, the story was slightly different: “I heard that Inova Hospital is in talks with Mary Washington to buy it.”
Fred Rankin, president and chief executive at Mary Washington Healthcare, said he’s heard similar stories off-and-on for more than 20 years.
Then, as now, his reply is always the same: “We are not for sale.”
At times like these, questions about Mary Washington’s future are understandable, perhaps inevitable, Rankin said in a recent interview.
The company’s financial performance has been disappointing. Net income dropped in 2011 and may drop again in 2012.
Healthcare reform casts an uncertain shadow.
And the company sails alone through these changes, while its neighbors seek shelter in corporate mergers.
Even so, Mary Washington was founded as a locally controlled, not-for-profit hospital more than 113 years ago, Rankin said, and it wants to stay that way.
“We are not negotiating with anybody,” he said. “We have no offers on the table from anybody. We have not asked for offers from anybody.”
Rankin said he and the hospital’s volunteer board of trustees periodically discuss the hospital’s future and which corporate structure would be best.
To date, he said, the board has decided that the best way to provide residents with stable and reliable health care is to remain independent.
“Someday it’s possible that we will have other affiliations,” he said. “However, our board believes in health care decisions being made locally.”
In many other Virginia localities, local boards have ceded control in hopes of bringing better care to the community.
Since 2008, at least four neighboring hospitals have merged with bigger health systems. These include Potomac Hospital in Woodbridge, Prince William Hospital in Manassas, Martha Jefferson Hospital in Charlottesville and Culpeper Regional Hospital.
Rankin said that at a recent meeting of the Virginia Hospital and Healthcare Association, he met with executives from the state’s last remaining independent hospitals. Seven hospitals were represented at the table.
“Everybody else is part of a larger company,” he said.
Katharine Webb, senior vice president for the VHHA, said last week that when she first started with the organization 30 years ago, she introduced herself to legislative committees in Richmond as a representative of an association of 110 Virginia hospitals.
“Now I say I represent 35 health systems,” she said.
Virginia still has 100-plus acute-care hospitals, Webb said. It’s just that many of them, especially the smaller ones, now stand under someone else’s corporate umbrella.
“It’s a really interesting time to be in health care,” Webb said.
The driving force behind these consolidations is money, or as Webb describes it, “access to capital.”
Hospitals need large sums of money to expand, renovate and modernize, she said. Their latest need is for funding for new electronic medical record systems, she said.
In Fredericksburg, Mary Washington has doubled in size in 20 years to serve the region’s growing population. Recently it spent $158 million to build a hospital in Stafford County.
“The investments that are required in a modern health care system today are overwhelming,” Rankin said.
Even so, Mary Washington generates enough income to pay its bills and invest in new technologies, Rankin said. And it remains an attractive property, one that continues to interest the state’s largest health systems.
Rankin said he regularly “talks shop” with executives such as David Bernd and Howard Kern of Sentara Healthcare in Norfolk, Knox Singleton at Inova Health System in Falls Church and Nancy Agee at Carilion Clinic in Roanoke.
They have consistently “respected our independence,” Rankin said. None has ever submitted a bona fide purchase offer.
Yet his conversations with them often end with some variation of: “If you’re ever interested in a merger, you know how to get ahold of us.”
Staff librarian Craig Schulin contributed to this story.
Jim Hall: 540/374-5433