After a six-month search, Daughters and Sisters have found each other.
The Roman Catholic sponsors of two of the nation's largest Catholic healthcare systems-Daughters of Charity National Health System and Sisters of St. Joseph Health System-said last week they are discussing a possible merger through a co-sponsorship deal.
A pairing of St. Louis-based Daughters of Charity and Ann Arbor, Mich.-based Sisters of St. Joseph under one umbrella organization would create the nation's largest Catholic hospital system when measured by revenues, with nearly $8 billion in annual revenues.
It would have 64 acute-care hospitals in 15 states and the District of Columbia.
MODERN HEALTHCARE revealed in March that 47-hospital Daughters of Charity was interested in a mega co-sponsorship deal (March 23, p. 4). And Crain's Detroit Business, a sister publication, reported earlier this year that 17-hospital Sisters of St. Joseph was shopping around for a partner.
The particulars of consolidating the orders' respective healthcare systems, as well as the timetable for pulling together the deal, will be worked out during negotiations over the next several months.
"It's just too early (to discuss details)," said John Lore, president and chief executive officer of Sisters of St. Joseph Health System.
The new organization will be based in St. Louis, where Daughters of Charity is headquartered, said John Marshall, a Daughters of Charity spokesman.
Lore said he is confident a deal will happen because the drive behind it is at the congregational level.
Ranked by number of facilities, Denver-based Catholic Health Initiatives would remain the largest Catholic system, with 70 hospitals. CHI, which has almost $5 billion in annual revenues, had been one of the five suitors seeking a merger with Sisters of St. Joseph.
The field of prospective partners also included Catholic Healthcare Partners, Cincinnati; Holy Cross Health System, South Bend, Ind.; and Mercy Health Services, Farmington Hills, Mich.
Strategic issues apparently helped Daughters of Charity stand out, and the mission and values of the religious orders are compatible. "It was due to both of their desires to strengthen Catholic healthcare in the state of Michigan and more globally in the country," said Pam Wong, a spokeswoman for Sisters of St. Joseph.
Sisters of St. Joseph operates exclusively in Michigan, where Daughters of Charity has regional systems anchored by two hospitals in Southfield and Saginaw.
"The Daughters of Charity have a strong presence in Michigan, and the strategic advantage which can be achieved by the organizations in this consolidation is exciting and promises great success," Patricia Cahill, president and chief executive officer of CHI, said through a spokeswoman.
Lore said the systems don't expect antitrust problems, because their markets don't overlap.
Both Daughters of Charity and Sisters of St. Joseph are strong financially.
In 1997 Daughters of Charity had net income of about $279 million on revenues of almost $5.9 billion (March 23, p. 4). According to Sisters of St. Joseph, the system had 1997 net income of $62 million on net revenues of $1.5 billion.