Insight, a health-care organization headquartered in Flint, Michigan, has signed a letter of intent to acquire Sturgis Hospital and has entered into a period of “due diligence.”
Sturgis City Commission held a special meeting Monday to discuss details of the proposal. Proposed terms of payment upon closing is $3.3 million for 11 years, beginning in September 2024.
City commissioners on Monday approved a motion to pursue the proposal, and to authorize city manger Andrew Kuk and city attorney TJ Reed to formalize paperwork.
City and hospital officials said the preferred timeline for a decision is “a matter of weeks.”
Sturgis Hospital has struggled financially for several years, and has been in danger of closure in recent months. Earlier this month, the hospital was granted designation as a “Rural Emergency Hospital” from Michigan Department of Health and Human Services and Centers for Medicare & Medicaid Services. REH status enables the hospital to provide outpatient and lab services and continue emergency-room care.
In a media statement from Insight, Dr. Jawad Shah, neurosurgeon, founder and CEO, said the Sturgis community is “in critical need of a hospital for essential, life-saving care.”
“The city leadership, public, and private stakeholders are impressive in their collective will to see the community thrive,” Shah said. “It is humbling to have Insight considered as a partner to ensure the long-term success of Sturgis Hospital.”
Insight is one of two firms under consideration for acquisition of Sturgis Hospital. In July, commissioners discussed a proposal from Asker Corp. Asker, a for-profit operation, proposed paying $1.5 million for the hospital up front, then $1.5 million more over five years.
Additional discussion regarding that proposal has had little new action in recent weeks, Kuk told commissioners Monday.
Brief discussion took place Monday among commissioners about including a provision to facilitate transition from Rural Emergency status to full-service facility. Although officials agree it would be ideal for the hospital to return to full-service, the city might not want to add such a stipulation to the negotiation.
“Anything is possible, but I don’t think they’re in a position to guarantee that at this point,” Kuk told commissioners.
Atif Bawahab, chief strategy officer at Insight, said the company is optimistic the hospital can operate in a financially stable fashion,” with support from all levels of government.
“Insight is interested in being a partner in providing for the community’s health care needs,” Bawahab said.
Insight operates surgical centers, a surgical hospital, outpatient health care facilities and
youth development initiatives in Michigan, along with a safety net hospital in Chicago.