Mission Health sale to create $1 billion-plus foundation
The pending sale of Mission Health System to HCA Healthcare would create the second-largest private foundation in North Carolina, trailing only the $3.5 billion Duke Endowment, according to officials of the Asheville-based hospital group.
“It was the right time to do this,” Mission board member Tom Oreck says. “We are the strongest we’ve ever been. With all of the consolidation because of the tremendous cost pressures on systems, this was the perfect time to do something that was coming eventually.”
Oreck and Mission CEO Ronald Paulus wouldn’t discuss terms of the transaction, but their comments implied HCA would be paying more than $1 billion, and possibly much more. The state’s largest foundations include Charlotte-based Foundation For The Carolinas, which oversees $2.5 billion, and the Golden LEAF Foundation, based in Rocky Mount, which has about $1 billion. The larger Mission foundation, Oreck says, would provide “tens of millions of dollars” of philanthropy annually to health care-related groups in western North Carolina, where Mission is the largest employer and a dominant economic force.
Mission is a not-for-profit, which offers some tax advantages compared with private businesses such as HCA, which operates 179 hospitals and more than 100 surgery centers across the U.S. Hence, the region should benefit from increased tax revenues paid by HCA in addition to the expanded foundation, says Oreck, an Asheville resident and former CEO of his family’s vacuum company.
“We believe this partnership is great for this community. It puts us in a position to continue down the path in offering the best quality of care,” he says.
Paulus says he’s likely to stay with HCA in his current post, noting that the company does not operate in North Carolina now. “They are looking forward to significant growth in the state and we will be the focus of their efforts.”
Oreck wouldn’t disclose other organizations that met with Mission regarding a possible combination.
The transaction is subject to review by N.C. Attorney General Josh Stein. In an emailed statement, Mission said, “While we can’t presume to speak for regulators, we do not anticipate any competitive concerns.”
Paulus has led the Asheville hospital for seven years. “Mission has accomplished some incredible things in its 100-plus year history,” he says. “In the time I’ve been here, the team has done a remarkable job. But for us to get better, we needed a partnership.”