Delta Medical Center in Memphis is set to become possibly the only employee-owned hospital in the country. The 243-bed facility's owners had considered selling it to a for-profit chain, but instead have transferred all of their stock into a leveraged Employee Stock Ownership Plan, which serves as the hospital's pension plan. A local bank put up $21.5 million in loans to finance the plan, while the former owners took a promissory note for the other $10 million. The ESOP will pay off the loans out of the hospital's profits. Employees won't have to put in any of their own money. ESOPs in hospitals had a heyday back in the 1980s when all kinds of companies were doing them, but a spokesman for an association of ESOPs says he hasn't heard of one in a long time and has no hospitals among his current members.
Catch up on Delta Medical's plans:
- see this story in the Memphis Daily News