Cleveland Clinic set to absorb Indian River Medical Center with 10-year, $250 million commitment

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WHAT HAPPENED

Indian River Medical Center in Vero Beach, Florida, came a step closer to officially joining the Cleveland Clinic health system Wednesday 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 the facility joining the fold.

Under the terms of the transaction, Cleveland Clinic is committing to invest at least $250 million in IRMC over the next 10 years.

IMPACT

After a public meeting on Sept. 25 at which 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, the IRMC directors and IRCHD trustees came to the same conclusion: the future of healthcare in Indian River County is with Cleveland Clinic.

When finalized, IRMC and its affiliates will become part of the 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.

In addition to the $250 million investment, the agreements say Cleveland Clinic will maintain maternity care (labor, delivery and obstetrics), in-patient pediatrics and gynecology services, behavioral and 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 postpartum care.

After the customary filings and approvals, the transaction is expected to be complete by the end of the year.

ON THE RECORD

"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."

THE TREND

There's been a lot of mergers and acquisition activity this year, including a record-breaking first quarter, with about $156 billion in deals on the books by March. 

Indian River Medical Center is a 332-bed nonprofit hospital that has been serving Florida's Treasure Coast community for 85 years.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com