After watching Roman Catholic hospital systems get bigger and stronger over the past several years, Daughters of Charity National Health System wants its own mega-merger, MODERN HEALTHCARE has learned.
Long recognized as the nation's largest Catholic hospital system, Daughters of Charity has seen Catholic Healthcare West, Catholic Health Initiatives and Catholic Health East become regional, if not national powerhouses.
No potential partners are known, but a Daughters of Charity executive confirmed the system is interested in a co-sponsorship deal, similar to that which created the powerhouse Catholic Health East last year.
Catholic Health East, with more than 30 hospitals on the East Coast, was created last year when Allegany Health System, Tampa, Fla.; Eastern Mercy Health System, Radnor, Pa.; and Sisters of Providence Health System, Holyoke, Mass., announced their consolidation (June 2, 1997, p. 8). Based in Radnor, the new system has facilities in 10 states and annual revenues of $2.8 billion (Jan. 19, p. 24).
Talk about potential partnering for the Daughters of Charity on a national level follows a restructuring that started within the St. Louis-based system last year.
Such a national affiliation is more likely since Daughters of Charity revamped its governance structure, eliminating regional boards and leaving governance at the national and local ministry levels (Feb. 9, p. 8).
While Daughters of Charity co-sponsors healthcare on a local level, it hasn't done so on a national level with its entire system of 60 healthcare facilities, including 46 acute-care hospitals that it owns or co-sponsors. The system operates in 15 states and the District of Columbia.
"In the past three years it was determined that if we want to really help the ministry of the church, we need to restructure so we can do things in a different way," said Sister Bernice Coreil, vice president of system integration at Daughters of Charity.
"We're committed to strengthening the Catholic health ministry in the new millennium," Coreil said.
For example, on the local level, Daughters of Charity is one of the sponsors of a regional healthcare system, Catholic Health System of Western New York (July 28, 1997, p. 20).
Daughters of Charity is strong financially. A spokesman said the system had 1997 net income of about $279 million on revenues of almost $5.9 billion.
"It's not so much to strengthen the Daughters," Coreil said. "We want to be able to work with others so the mission will grow bigger and be able to do more for those who have less."
Coreil wouldn't divulge possible partners. However, she did confirm that some initial discussions have taken place. Daughters of Charity is interested in meshing with other Catholic systems.
She said the system hasn't solicited potential merger partners but has been approached by several systems.
Daughters of Charity does have close ties to other Catholic systems. For example, Donald Brennan, its president and chief executive officer, sits on the board of Denver-based CHI.
CHI was formed in 1996 through the merger of Catholic Health Corp., Omaha, Neb.; Franciscan Health System, Aston, Pa.; and Sisters of Charity Health Care Systems, Cincinnati. Now with 68 hospitals, CHI has surpassed Daughters of Charity in numbers of hospitals.
Daughters of Charity is in the process of acquiring 78-bed Harrisburg (Ill.) Medical Center. Its most recent acquisition before that was 159-bed Mount St. Mary's Hospital of Niagara Falls, Lewiston, N.Y.
Coreil said Daughters of Charity would entertain a deal where systems would come together to form a new company, and it might even involve an asset merger.
Such a deal would likely result in a new system name, such as in the case of Catholic Health East.
"It's a big step," Coreil said.