The Vatican's rejection last month of a Roman Catholic hospital's proposed consolidation with a secular hospital could be a harbinger of Rome's intentions as Catholic facilities step up consolidation efforts.
So say Catholic healthcare observers, who were taken aback by the Vatican's decision to nix a proposed partnership between St. Peter's Medical Center, a 416-bed Catholic hospital, and Robert Wood Johnson University Hospital, a 409-bed secular not-for-profit (June 23, p. 4). Both are in Brunswick, N.J.
"Now that there is more scrutiny by the federal government of healthcare transactions, the church officials have also begun to scrutinize these transactions more closely," said Sister Margaret Mary Modde, a canon law consultant with the Chicago-based law firm McDermott, Will & Emery. "The Holy See is not experienced with these transactions and the reasons behind them. But as the number of transactions increase, so does the Holy See's interest."
The Vatican's rejection of the New Jersey deal is believed to be the only time the Vatican has blocked a hospital deal, especially one that had the blessing of local church officials.
After the proposed joint operating agreement passed muster with the local bishop in New Jersey, a Vatican ruling body known as the Congregation for the Clergy rejected it. It did so despite the fact that Robert Wood Johnson University Hospital would stop performing any procedures in violation of the church's teachings.
"Persons contemplating potential collaboration with non-Catholic healthcare providers where the deals are of such magnitude as this issue need to insist on face-to-face meetings with officials of the Holy See in order to completely lay out the pros and cons of the deal," Modde said. When Cleveland-based Sisters of Charity of St. Augustine Health System signed a joint venture in 1995 with for-profit Columbia/HCA Healthcare Corp. of Nashville, one of three bishops who presided over hospitals was opposed to the deal, but the Vatican approved it.
In that case, Catholic canon lawyers said the Vatican gave weight to the approval of the bishop in the Cleveland diocese, where the Sisters headquarters was located.
The Catholic Health Association, which represents nearly 590 Catholic hospitals across the country, continues to review the Vatican's ruling in the New Jersey case.
"Every deal is unique," said CHA Executive Vice President William Cox. "Dialogue is always welcomed and important. What may occur in one situation does not mean that another partnership or alternative solution would be problematic," he said.