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Ohio Valley Medical Center in Wheeling and East Ohio Regional Hospital in Martins Ferry purchase completed by Alecto Healthcare Services


The Intelligencer and Wheeling News-Register

WHEELING, W.Va.  — Alecto Healthcare Services has completed its acquisition of Ohio Valley Medical Center in Wheeling and East Ohio Regional Hospital in Martins Ferry after a four-month process.

Alecto, based in Irvine, Calif., finalized its purchase of the two hospitals from Ohio Valley Health Services and Education Corp. on Wednesday. The purchase price was not revealed.

At the same time, Michael Caruso, president and CEO of OVHS&E, will depart from the hospitals’ administration. According to a statement released Thursday, Caruso has elected not to continue as CEO after the close of the sale.

“I believe this is the right thing to do, to allow Alecto to come in with a new, fresh set of eyes to run our organization,” Caruso said. “Alecto is investing millions of dollars into our organization and the future is very bright for OVMC and EORH. While I have tremendously enjoyed my five years as president and CEO, I also understand that Alecto leadership needs to have the opportunity to come in and manage the organization directly.”

Alecto officials said a restructuring of the administrative staff will occur with the transaction, but they did not indicate when a new administrator would be named.

“At this time, the Alecto team, including CEO Lex Reddy, are on site at the hospitals and will be serving in this administrative capacity until a new chief administrator is named,” said attorney Mike Garrison, which has represented Alecto throughout the process.

Garrison did not say whether any other members of management at the hospitals would be leaving, but he expects there will be “natural attrition at the upper management levels in an effort to promote efficiency.”

“From the beginning of this transaction, Alecto has been committed to preserving the jobs of the caregivers at the hospitals,” he added. “The rank-and-file employees who are essential to maintaining and enhancing quality care are very important to the future success of the hospitals.”

The hospitals, which were nonprofit facilities previously, will be operated as for-profit entities by Alecto. Officials could not say whether the hospitals’ names eventually would be changed under the new ownership.

“Currently, the names of the respective hospitals will remain the same,” Garrison said. “Alecto will be evaluating this, along with many other issues, in the upcoming months and plans several announcements.”

Alecto announced its intention to buy OVMC and EORH on Jan. 27, and said its plan “calls for significant reinvestment in equipment and infrastructure at both campuses to enhance the delivery of care in the Ohio Valley.”

OVMC filed a request with the West Virginia Health Care Authority in February for a certificate of need for the sale. Midway through the process, however, state law was changed to allow “financially distressed” hospitals such as OVMC to bypass the certificate of need process.

EORH received permission from Ohio Attorney General Mike DeWine for its part of the deal to proceed.

Lex Reddy, president and CEO of Alecto Healthcare Services, said, “We are excited to expand our operations to the Ohio Valley. We are a community-focused health care system and we are looking forward to supporting and working with the physicians, employees and the residents on both sides of the river.”

Caruso said, “Alecto is the right choice for continuing the tradition of state-of-the-art, quality care that OVMC and EORH have provided to this community for more than a century.”

Alecto has pledged millions of dollars in improvements in the coming months. The firm said it has purchased new cardiac monitors and defibrillators and has plans to upgrade equipment and infrastructure at both hospitals.

On May 16, Wheeling City Council voted 6-0 to enter a memorandum of understanding with Alecto. The agreement calls for the city to pay $1.5 million for upgrades and new elevators at the Center Wheeling parking garage, with an additional $1.5 million earmarked for demolition of the former nurses’ residence building at OVMC.

That money will come from an anticipated $5 million tax increment financing bond sale that will leave $2 million for city officials to spend on development projects in downtown and Center Wheeling.

OVMC, founded in 1890 as City Hospital, is a 200-bed health care facility in Center Wheeling. In affiliation with the West Virginia School of Osteopathic Medicine, OVMC has an osteopathic medicine residency program offering residencies in internal medicine, emergency medicine and traditional internal-emergency medicine fields. The hospital also operates the OVMC School of Radiologic Technology, a two-year hospital-based education program.

EORH, founded in 1906 as Martins Ferry Hospital by Dr. R.H. Wilson, is a 140-bed health care facility in Martins Ferry. EORH works with the East Ohio Medical Office Building and East Ohio Regional Hospital Outpatient Centers in St. Clairsville. EORH operates a federally-funded Respiratory and Occupational Black Lung Clinic and a certified skilled-rehabilitation unit.

This will be the second operation in the region for Alecto, which was founded in California in 2012. Alecto acquired Fairmont Regional Medical Center, formerly Fairmont General Hospital, a 207-bed acute care facility in Marion County, in 2014.

“We have enjoyed our experience in the West Virginia market,” Reddy said.

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