Letter of Intent
Summary of Key Terms
Dartmouth-Hitchcock Health (D-HH) and GraniteOne Health (GOH) have signed a non-binding letter of intent (LOI) describing their intent to combine their health systems in order to form a more effective vehicle to better serve the health care needs of their patients and communities throughout New Hampshire. While further detail will be set forth in a final, definitive agreement, the following is a summary of the key terms contained in the LOI:
Section 1. The Parties to the LOI are the D-HH and GOH systems.
Section 2. Catholic Medical Center and Monadnock Community Hospital have each worked with Dartmouth-Hitchcock for years to care for patients and communities in southern New Hampshire. Based on that experience, D-HH and GOH believe they can do more together than separately to meet patient demand and community needs for: (a) improved access to primary, specialty, ambulatory and inpatient services in New Hampshire; (b) continued access to rural health care and the skilled workforce to support new and existing services; (c) high quality, coordinated and cost effective care for a healthier population; and (d) more efficient delivery of health care and preventive services.
Section 3. The combination will not take effect until and unless D-HH and GOH reach agreement on final terms in a more definitive agreement.
Section 4. The name of the combined system will be “Dartmouth-Hitchcock Health GraniteOne,” which will be governed by a 15-member Board of Trustees (“System Board”) comprised of 9 D-HH appointees and 6 GOH appointees. While each member of the combined system will fall under the new Dartmouth-Hitchcock Health GraniteOne corporate umbrella, each charitable organization will maintain its unique identity and mission, and be governed by its local board of trustees and managed by its local leadership. In order to implement the combination and unify the system to achieve its stated goals, however, the System Board will have certain “Reserved Powers” to coordinate the conduct of its members, except with respect to the affairs of Catholic Medical Center, over whom the Reserved Powers will be shared with CMC Healthcare System and the Roman Catholic Bishop of the Diocese of Manchester.
D-HH and GOH expressly acknowledge that maintaining and furthering Catholic Medical Center’s historical Catholic health care mission is paramount and that Dartmouth-Hitchcock Health GraniteOne will not require Catholic Medical Center to provide any programming, services or procedures that are against the teachings of the Catholic Church or a violation of the “Ethical and Religious Directives for Catholic Health Care Services” or otherwise contrary to the Code of Canon Law.
The combined system will be managed operationally by a system chief executive officer and two regional presidents. Joanne M. Conroy, MD, CEO and President of Mary Hitchcock Memorial Hospital will be the system CEO and President of Region I, and Joseph Pepe, MD, CEO of Catholic Medical Center will be the President of Region II. The roles and responsibilities of the system CEO and regional presidents, together with the clinical and operational integration plans for the combined system, will be further developed by the parties and described in the Definitive Agreement.
A “Member Leadership Council” will be created and comprised of representatives from the combined system’s members to serve as an advisory group on system-wide matters.
Section 5. Following the combination, each member of D-HH and GOH will retain ownership and control of its endowment and donor-restricted funds. Each member’s local board of trustees will remain responsible for its own operational and financial decision-making, subject to consistency with the combined system’s strategic plan and approval by the System Board in the exercise of its Reserved Powers.
Catholic Medical Center will not be required to make any capital expenditures for programming, services, or operations that would be inconsistent with its Catholic health care mission or contrary to the ERDs.
Following the combination, the GOH members of the combined system will have the opportunity to join the Dartmouth-Hitchcock Obligated Group in order to take advantage of more favorable, system-wide capital financing opportunities.
Section 6. The combined system will be committed to maintaining and improving upon the core clinical services available in each member’s community. System decision-making about clinical programming will ensure that patient demands and local community needs for services are met and delivered in a high-quality, cost-effective manner, including substance use disorder and behavioral health care.
Section 7. D-HH and GOH have taken steps to respond to the growing demand for mission-critical access to their services by separately planning and undertaking three major capital projects: 1) D-HH will build an ambulatory surgery center at the Dartmouth-Hitchcock Clinic in Manchester; 2) Catholic Medical Center will expand its hospital in Manchester to increase its strained capacity; and 3) Mary Hitchcock Memorial Hospital in Lebanon will expand to increase its strained capacity.
While D-HH and GOH have separately planned these projects, combining to act together would allow them to invest jointly in this critical infrastructure in a more strategic and efficient manner than if they did so independently.
Section 8. GOH will ask each of its members to join the combination and sign the Definitive Agreement. (Each of D-HH’s members will become part of the combination upon the approval of the D-HH Board of Trustees following its exercise of due diligence).
Section 9. D-HH and GOH will conduct further due diligence and develop an operational plan to make their vision of an integrated, coordinated health care delivery system responsive to patient demand and community needs a reality.
Section 10. D-HH and GOH will negotiate in good faith to reach a final, Definitive Agreement that will contain the customary terms and conditions necessary to form the combined system, including required corporate and transactional documents.
Section 11. The formation of Dartmouth-Hitchcock Health GraniteOne will be subject to fulfillment of various conditions and receipt of multiple approvals, including from the D-HH and GOH Boards of Trustees, state and federal regulators, the Bishop of the Roman Catholic Diocese of Manchester and any other approvals required by Canon Law, among others.
Sections 12, 13, 14, 15, 16, 17, 18, 19 contain usual and customary legal and technical provisions.
Click here for the full Letter of Intent.