In August 2019 Covenant Health announced plans to build a new hospital in Hobbs, with a groundbreaking in January 2021, but on Tuesday Covenant announced it will be in Lea County even sooner by purchasing Lea Regional Medical Center.
Tuesday, Covenant signed a purchase agreement with Lea Regional and it corporate owner, Community Health Systems Inc., with an anticipated closing date of Jan. 1, 2021, in which Covenant will acquire the existing facilities at Lea Regional.
“Covenant Health’s acquisition of Lea Regional Medical Center gives them an immediate, local presence providing in patient hospital services as part of their commitment to this area. Our caregivers will become part of their organization and Hobbs residents will benefit from continuous access to local healthcare,” LRMC CEO Dan Springer said.
Covenant Health regional chief executive officer Richard Parks said he is excited about the opportunity to make a more immediate impact in the community, and looks forward to working with existing doctors and staff, as well as the opportunity to bring in more caregivers and services to the Hobbs area.
“We’re very excited to be here sooner than we thought. The opportunity came up, and we started working with (Lea Regional) and one thing led to another, and we were able to consummate the acquisition today. So, we’re really excited about being here quicker than we thought,” Parks told the News-Sun.
“I think it’s a great day in our community,” Hobbs Mayor Sam Cobb said. “It gives us a huge opportunity to dramatically improve the quality of life and gives us the opportunity to become a regional player in health care, which is a great diversification of our local economy.”
Appearing before the Hobbs City Commission on Tuesday, Parks said discussions with Community Health Systems began about 60 days ago.
The purchase is expected to include all of LRMC’s assets, clinics and programs in Lea County.
“We certainly hope all those caregivers and physicians will be interested in staying,” Parks said. “We would love to have them join us in service to the community.”
With the purchase of Lea Regional, Covenant still plans on breaking ground on the new facility at Lovington Highway and Millen Drive in January, but there will be some changes to the plans already announced. The facility will still be more than 105,000 square feet, but will increase the bed number from 32 to 60. Likewise, the number of ICU beds will increase from four to eight, and medical surgical beds will increase from 20 to 44, while the emergency room should stay similar with a full ER and there will still be eight Labor Delivery Recovery Postpartum beds.
Parks said Covenant will probably add an MRI and other additional X-ray equipment now that it will be a bigger hospital.
“We’re basically doubling in size,” he said.
In addition, when the new hospital opens, Covenant will be moving current medical services from the Lea Regional building to the new facility. Once started in January, construction of the new hospital is expected to take about 18 months, Parks said, and Covenant is still planning on a September 2022 opening.
“We’re still planning on building the new hospital,” Parks told the News-Sun Tuesday afternoon. “We’ll be moving current services and employees and physicians over to that new hospital. We’re not sure yet what we may do with the existing Lea Regional Medical Center building and property. We may use it for outpatient services or physician office building. We’re just not sure at this point.”
He also noted it is easier and less costly to build a new hospital rather than renovate the Lea Regional property to the standards Covenant would want the facility to be at.
Parks said when Covenant first announced they would build a new hospital in Hobbs, they had not anticipated the acquisition of Lea Regional and had done a lot of studying of the area. Those studies have paid off by making it easier to make adjustments for the new hospital, prior to breaking ground.
He said about 50% of county residents currently travel outside to Lea County for medical services.
“We saw their (LRMC) average daily census and what we thought we could grow the business to be here and change the facility from a 32-bed facility to a 60-bed facility,” Parks said Tuesday. “We’ve gone back and are in the process of redesigning the new hospital.”
Currently Lea Regional is licensed to have 99 hospital beds, although when it was built, the facility was designed to accommodate several hundred if needed. Lea Regional currently employs between 250-300 people.
Covenant purchasing and building a new facility starting in January also means added benefits in the way of additional physician and specialist caregivers in the Covenant system being able to do a rotation to Hobbs, as well as recruiting new physicians who will live in Hobbs, Parks said.
“Part of the intention is to have an attractive opportunity so a specialist can come and be housed (in the Hobbs area.) I would anticipate that would be part-time, and they would do rotations,” Parks said. “Surgeries are capable of being scheduled and they’ll make the trip over here for the surgeries.”
Parks anticipates specialists and sub-specialists would come over for one or two days a week initially to build up an office practice in Hobbs.
“Obviously we’ll be recruiting physicians to live in Hobbs as well, which will be even better,” he said.
Parks said commitment to eastern New Mexico by Covenant has never been stronger.
“After four years of coming to Hobbs, I’m very thankful and excited to be able to offer a Covenant Health facility here and we are really engaged in trying to make this successful for your community and for our health system,” Parks said.
Community Health Systems, which owns or operates 93 hospitals across the country, also owns the hospitals of Carlsbad Medical Center, Mountainview Regional in Las Cruces and Eastern New Mexico Medical Center in Roswell. Parks noted Community Health Systems has sold approximately 37 facilities in the last year as the publically traded company adjusted its financial holdings.
No purchase price for Lea Regional was disclosed.