Crest Hospital in Palmerston North is set for a shareholder reshuffle as Southern Cross Healthcare helps set up succession plans for its existing partners who are nearing retirement.
The private hospital operator, a sister company to the country's biggest health insurer, plans to buy out its joint venture partners in the hospital – 11 specialists and surgeons who are at or nearing retirement – then sell that Aorangi Hospital entity to mid-career professionals in the Manawatū region.
The Commerce Commission received a clearance application from Central Healthcare Operations – the mid-career medical practitioners – which wants to buy 100% of Aorangi's shares, which would give the new entity a 50% stake of Crest Hospital, Palmerston North's only private hospital.
“Many of these specialists currently practice at the Crest Hospital,” the commission said in a statement last week.
Central Healthcare Operations is owned by a group of 40 shareholders associated with healthcare practitioners, including surgeons and specialists practising in the Manawatū.
The most recent addition to Central Healthcare Operations was Yanyi Chuah, an anaesthetist at MidCentral district health board, who bought into the entity at $25 a share on Nov 1, according to Companies Office filings. That valued the company at $12.6 million.
Plan ahead
Southern Cross Healthcare chief executive Chris White said the private hospital operator is always planning ahead, which needs a strong clinical workforce.
There's also a growth opportunity, with a sister company to Central Healthcare Operations, Central Healthcare Ltd, developing new consulting rooms at nearby land it owns on Milson Line.
"The common ownership link between Crest Hospital and the development at Milson Line would be of great benefit to the future of healthcare delivery in the Manawatū, particularly as we expect demand for services to increase over time," White said.
"Sustaining and developing the region’s clinical workforce, alongside the potential development of consulting and specialist rooms, will mean more local residents and the wider Manawatū region will have access to quality private healthcare."
Central Healthcare Operations said in its application to the commission that its sister company plans to add a dental suite and radiology department to the outpatient suites at the Milson Line site.
The commission has to be satisfied the deal won't lead to a lessening in competition to clear the transaction.
Central Healthcare Operations said in its application that the proposed transaction wouldn’t give rise to any “adverse” competition effects, and was more likely to help “material efficiencies and public benefits”.
Crest Hospital has four operating theatres and a fifth due to open this month, one procedure room, a 10-bed recovery room, 30 inpatient beds and 21 day-stay beds and chairs.
Its specialists include orthopaedics, urology, gynaecology, general surgery, ophthalmology, otolaryngology, endoscopy, oncology and oral surgery.
A decision is expected on Jan 18.
Additional reporting by Paul McBeth.
