Angel entered into an affiliation with Mission in 2013. Mission guaranteed Angel’s outstanding bonds and injected much-needed funds for capital and other needs. Mission also provided the efficiencies of a much larger organization such as purchasing, administration, recruiting medical providers, access to specialized services and more; importantly, it has provided ongoing financial support of Angel’s operations. 

Angel’s affiliation with Mission provided various protections for Angel’s operations and services through 2023. 

Under certain circumstances, which include the acquisition of Mission by another entity, Angel had the right to withdraw from its affiliation with Mission. As a condition of withdrawal, however, Angel would need to assume responsibility for repayment to Mission of any funds expended by Mission on behalf of Angel, and Angel would also have to either assume, or find another party that would assume, responsibility for guaranteeing repayment of Angel’s outstanding bonds. The total amount of those outstanding financial obligations is in excess of $13 million. 

Although not required to do so as a condition of the affiliation arrangement with Angel, Mission planned to build a replacement hospital for Angel’s aging, outdated facility. Mission obtained the certificate of need for the construction of the replacement hospital with the facilities desired by Angel’s Community Board Members with a cost not to exceed $45 million. 

Angel was notified this spring of the potential acquisition of Mission by HCA. The corporate bylaws of Angel authorize the Community Board Members to obtain legal, consulting, and other services required in order to analyze whether Angel should withdraw from its affiliation with Mission. We promptly retained both independent legal counsel and an independent healthcare consulting firm. Both of these are familiar with Angel and the healthcare market in this region of the U.S.

First, the law firm analyzed the terms of the transaction between Mission and HCA to determine how Angel might be affected. Mission and HCA had an extended period of negotiations during which the terms of the transaction were negotiated and changed at various steps. Throughout, Mission was receptive to and pursued changes requested by Angel’s attorneys. 

Second, working with consultants, we explored alternatives to participating in the HCA transaction. It was immediately apparent that Angel could not return to its former status as a free-standing hospital. As a free-standing hospital it would not be able to meet its financial obligations to Mission, to its bond holders, build a replacement hospital or even pay ongoing operational expenses. 

Third, working with its attorneys and consultants, we explored the possibility of other health systems affiliating with Angel on comparable or better terms. After a period of exploration with plausible health systems, it was determined to be unlikely that another system would make the financial commitments necessary (at least $58 million) to offer a desirable alternative to participating in the HCA transaction. Beyond the amount of the investment that would be required, we also would require the same level of protections for Angel’s future operations that could be obtained in the transaction with HCA. 

It quickly became apparent to the Community Board Members that participating in the HCA transaction was the superior course of action. In some respects, the HCA transaction offers more protection for Angel than its current affiliation with Mission. Angel’s current affiliation only provided authority for Community Board Members through 2023, whereas the HCA transaction will authorize certain protections to a local board through 2028. 

Angel will receive its replacement hospital as a contractual commitment from HCA. Angel will not have any financial responsibility for its outstanding bonds or the amounts previously received from Mission, both of which will be satisfied from Mission’s proceeds from the HCA transaction. Angel will retain a local board with community members with comparable “veto” authority over major decisions. In other words, all of the objectives for Angel that the Community Board Members sought to preserve through a transaction, whether with HCA or another party, have been preserved. 

In addition, Mission will provide $15 million over a three-year period to community foundations of its various affiliated hospitals, including one for our community. 

In sum, the 10 Community Board Members unanimously approved Angel participating in this transaction. In our best judgment, the transaction offers the best opportunity of providing quality hospital services for our community on an ongoing basis. This was a reasoned and informed decision made over a period of months working with attorneys and consultants. We are excited about the future of healthcare in our community and believe that our acquisition by HCA will provide a strong foundation to ensure the success of Angel long into the future. 

Jane Kimsey, Angel Board Chair 

Community Board Members Thom Brooks, Jeff Cloer, Janet Greene, Connie Haire, Russell Hawkins, Johnny Mira-Knippel, Ken Stonebraker, Chuck Sutton and Dale West