value and a separate asset valuation. An investment banking consultant oversaw the process involving at least three bidders including Catholic/not-for-profit and for-profit firms.

Community Control

The community continues to have involvement with Providence through the CSA partner. As the not-for-profit partner, CSA has continued to invite community leaders to serve with them on the partnership board. CSA continues to control the hospital's Mission.

Community Health Impact

Hospital Survival. The conversion likely will improve the hospital's long-term survival prospects. The Partnership is building a new hospital and expanding services at Providence, improving its ability to compete.

Access. The sale has not led to barriers to access for the uninsured or Medicaid patients. The partnership guarantees continuation of the Catholic Mission (creating an executive position to monitor compliance). An annual audit, overseen by an ad hoc committee of the partnership board, obtains information from multiple sources, including interviews and hospital financial/operational data. No access problems have been identified.

Services increased at the hospital following conversion. Since conversion, Providence has added or expanded several services. The Partnership now is building a new 64-bed hospital, 25 of which are acute beds (This hospital may have been built anyway by Providence or a competitor, but the partnership probably accelerated the process).

Cost. The partnership has stimulated significantly greater hospital competition. The partnership led to the unexpected merger of two local hospitals and could result in two highly competitive hospital systems likely to benefit the area with lower prices and higher quality. Quality. Quality appears as good or better following conversion. Providence already had a reputation for high quality. There is no evidence this has declined and may have improved due to heightened competition.

Public Health. The sale may result in indirect effects on city public health. The new Foundation will focus on poverty, which may indirectly improve public health through higher incomes, improved nutrition and housing.

Economic Impact

Use of Sale Proceeds. The Foundation is a supporting organization to CSA, and is using its funds to meet the health and human services needs of the underdeserved. The restructured Foundation formerly was a $4 million dollar supporting foundation used principally for hospital capital needs. The new Foundation is the largest in the city and second largest in the state (its scope includes the entire state, but with special consideration for the hospital's service area). The first round of giving was completed in mid-1997.

Staffing. There were no appreciable reductions in staff following conversion. Despite C/HCA=s new management contract, the old Providence CEO and most senior management were retained. Staff anxiety about possible layoffs declined quickly when it was clear these were unlikely. Subsequent changes in policies, procedures and management systems led to staff stress, but these changes also helped improve productivity and therefore may have been adopted anyway.

Capital Investment. The partnership has increased hospital investment. New capital outlays by the partnership include $32 million for a new hospital and new/expanded services.