The Vatican has nixed a proposed mergerlike partnership between a Roman Catholic and a secular hospital in New Jersey because of a risk to Catholic teachings and practices.
It's believed to be the first time the Vatican, which ultimately reviews major transactions involving Catholic hospitals, has rejected such a deal.
Executives of 416-bed St. Peter's Medical Center and 409-bed Robert Wood Johnson University Hospital, which sit less than a mile apart in New Brunswick, N.J., confirmed late last week that the Congregation for the Clergy, a Vatican-ruling body, had rejected the proposed deal.
Under a proposed joint operating agreement, the hospitals wanted to merge their operations and future revenues while maintaining separate ownership and historic assets. The hospitals, which have been working on the deal for the past 18 months, would be governed by a third board.
In a statement, Bishop Edward T. Hughes of Metuchen, N.J., said the Vatican had determined that the proposed consolidation, in its current form, "poses too great a risk that Catholic teaching might be blurred or Catholic moral practices might be violated."
Because St. Peter's is a diocesan-sponsored institution, the proposed joint operating agreement with Robert Wood Johnson University Hospital passed through a variety of councils within the diocese before winding its way to Rome.
The bishop's explanation of the Vatican's decision speaks broadly of "Catholic Christian values" but fails to offer any specific criticisms, such as the church's position against abortion and certain reproductive healthcare services.
Under the hospitals' agreement, Robert Wood Johnson University Hospital would not perform any procedures in violation of the church's teachings, said Eileen Lawton, vice president for community relations at St. Peter's.
"The bishop played a key role from the beginning in helping us craft (the deal), and it was with his guidance and support that we pursued this," she said.
The Catholic Health Association was gathering and reviewing documents on the case and had no immediate comment on the matter.
"We think it would have been a real benefit to the people of New Jersey," said Harvey A. Holzberg, president and chief executive officer of Robert Wood Johnson University Hospital.
The hospitals said the deal potentially would have saved $75 million over five years, including operating efficiencies and capital savings.
Executives of the two facilities said it's too soon to speak about what happens next, but they left the door open to future talks.
In a memo to staff members, St. Peter's President and CEO John Matuska said he hoped to find ways to strengthen the relationship with Robert Wood Johnson University Hospital "consistent with the church's teachings."