Sex can complicate any relationship. Just ask Catholic hospitals.
A trail of merger deals between Roman Catholic and non-Catholic hospitals is exposing a culture clash in healthcare.
At the heart of it all: prohibitions the Catholic Church slaps on certain reproductive services, including tubal ligations, abortions, the "morning-after pill" and some fertility programs, which are routine at many non-Catholic hospitals.
This can complicate mergers, especially when a community learns its hospital wants to distance itself from such services-or abandon them altogether-to complete a deal with a Catholic hospital or health system.
The situation is likely to grow as hospitals in a consolidating industry seek out partners, and more mergers between Catholic and non-Catholic hospitals arise.
Some say the stewards of non-Catholic hospitals give up too much in deals with Catholic providers.
"There are many instances in which a community facing one of these mergers (has) only a minority Catholic (population)," says Lois Uttley, director of Albany, N.Y.-based MergerWatch, which monitors deals for their effect on women's services. "The result is that non-Catholics are being forced to have only the hospital care that Catholic rules will allow."
But not every merger of Catholic and non-Catholic facilities results in a loss of reproductive services. Creative corporate structures and the variety of forms a deal can take can help to preserve services in many instances.
Catholic healthcare leaders point out they don't force non-Catholic hospitals into merger deals.
"If the desired partner were actually being coerced into this relationship, you might have an argument," says Sister Diana Bader, senior vice president for mission at Denver-based Catholic Health Initiatives. "Nobody's being forced. This is a matter of a decision, a matter of choice. . . . Nobody's twisting their arm."
The Rev. Michael Place, president of the Catholic Health Association, which represents more than 1,200 Catholic healthcare providers and sponsors, puts it this way: "When you choose us, you choose who we are."
Measuring the impact. A report released this spring showed a loss of reproductive services in almost 50% of the deals between Catholic and non-Catholic hospitals from 1990 to 1997 (April 20, p. 26).
The report was done by the Washington-based Catholics for a Free Choice, a not-for-profit organization that opposes service cuts.
The report looked at 64 of the 84 mergers and affiliations between Catholic and non-Catholic hospitals during the seven-year period.
Those most seriously affected often were low-income women, who had few or no other providers to turn to.
The group was able to get information on 10 consolidations for its report. In 1997 alone, the report said, reproductive services were discontinued in 40% of the consolidations, and there were 14 total deals between Catholic and non-Catholic systems.
Catholics are a significant presence in the healthcare industry.
According to MODERN HEALTHCARE's 1998 Multi-unit Providers Survey, Catholic systems control 509 hospitals, an increase of almost 11% from 1997. Their hospitals account for about 22% of the total 2,362 facilities reported in the survey (May 25, p. 35).
In contrast, for-profit companies control 879 hospitals, an increase of almost 6% from 1997.
Distorted picture. Catholic healthcare leaders say the consternation over reproductive services is much ado about nothing. Advocacy groups, they say, unfairly characterize the situation.
"MergerWatch just blurs it all," says Sister Jean deBlois, vice president of mission services at the CHA.
Place says it's unfair to cast the issue as a purely Catholic one.
Choices about certain reproductive services are part of a larger context dealing with fundamental questions about healthcare resources in a community, he says.
For example, Place says, the board of a non-Catholic hospital may decide it's better to sacrifice tubal ligations than to risk a failed merger with a Catholic partner and try to go it alone.
"They're making value judgments about what's in the best interest," he says.
Place and other Catholic leaders bristle at suggestions they are on a campaign to stamp out legally available services that the Catholic Church finds morally objectionable. "There's not some grand conspiracy," he says.
The rules. Catholic hospitals play by a rule book called the Ethical and Religious Directives for Catholic Health Care Services.
Compiled and periodically revised by the U.S. National Conference of Catholic Bishops, the directives (as they are commonly called) are guidelines for implementing the moral teachings of the church.
Local bishops use the directives to review merger deals and as a basis for scuttling deals that don't pass muster.
It happened late last year, when the Roman Catholic bishop in Providence, R.I., called off a proposed merger between St. Joseph Health Services, a diocesan system, and Lifespan, a regional network of hospitals (Dec. 15, 1997, p. 6).
But Catholic hospitals do use creative corporate structures in some of their deals to avoid violating the directives.
Typically called corporate carve-outs, the structures offer a way to move what the Catholic Church considers morally objectionable services into a separate corporation that's not connected to the merged organization.
For example, a deal might be struck whereby physicians would perform tubal ligations at a separate outpatient facility, says Dennis Brodeur, senior vice president at SSM Healthcare in St. Louis.
"When you go into the deal, you need to know what you have to construct," Brodeur says.
This carve-out of services is typical, says the CHI's Bader.
These creative arrangements let hospitals and healthcare systems remain true to the directives because the Catholic facilities do not govern, manage or gain financially from objectionable services.
"We don't get into that business," Bader says.
At San Francisco-based Catholic Healthcare West, non-Catholic hospitals that come into the system adhere to a document called Common Values for Community Sponsorship, a sort of truncated version of the Catholic directives.
Because the Catholic directives govern Catholic hospitals but the merged facilities remain non-Catholic within the CHW system, the same rules don't apply, says Carol Bayley, the system's director of ethics and justice education.
However, three procedures are prohibited at CHW facilities:
Abortions, except when a mother's life is in jeopardy.
Artificial reproductive procedures, including donor insemination and in vitro fertilization.
"What we have said to the bishops (is) it's important that we have a relationship with these hospitals. We're not going to baptize them," Bayley says.
Of CHW's 39 hospitals, eight are non-Catholic.
One of those hospitals is 111-bed Sierra Nevada Memorial Hospital in Grass Valley, Calif.
Joe Lloyd, M.D., is an anesthesiologist and a Sierra Nevada board member who worked on the deal when the hospital became part of CHW in 1995. Lloyd says the secular hospital wanted to become part of a larger chain but did not want to become a Catholic facility. In its deal with CHW, it didn't have to.
Out of the Sierra Nevada deal grew CHW's statement of values for community sponsorship.
The prohibition on abortions and euthanasia wasn't restrictive, because Sierra Nevada hadn't performed the procedures before the merger, Lloyd says.
Tubal ligations, vasectomies and birth control are still offered by the hospital. If they weren't, the nearest hospital is 25 miles away, he says.
"We felt it potentially would be a disservice to limit necessary services," Lloyd says.
Community interests. In some instances, hospitals will choose to discontinue services the Catholic Church finds objectionable, because they are interested in partnering with Catholic facilities.
"That will often happen in a community where there (are) a sufficient number of providers so they don't feel there is a loss of services," Bader says.
But that's not what's happening in Batavia, N.Y.
There, Genesee County's only two hospitals-one Catholic, one not-have proposed to merge (Aug. 31, p. 60).
Genesee Memorial Hospital, a 70-bed facility, and 96-bed St. Jerome Hospital have proposed creating a new company owned 50-50 by the private not-for-profit group that now runs Genesee Memorial and the Catholic Health System of Western New York, which sponsors St. Jerome. Under the proposed merger, Genesee Memorial would remain an acute-care hospital and St. Jerome would become a post-acute facility.
The deal requires Genesee Memorial agree to follow the rules of the Catholic Church, which will mean no more tubal ligations at the hospital. Abortions aren't at issue, because the hospital doesn't perform them.
Community activists are upset over the terms of the merger, which still needs final certificate-of-need approval from the state.
The CON applications on file with the state include a proposal to carve out the tubal ligations and have them performed at a new, separate outpatient center that would be built.
However, women who wanted tubal ligations immediately after a Caesarean section would have to be referred to other hospitals outside Genesee County to give birth and have the procedure done.
These compromises for women's reproductive services often don't satisfy communities.
"Some of these creative solutions cause a fragmentation of women's healthcare when you try to shift patients to a clinic somewhere else," says MergerWatch's Uttley.
Undone deals. Sometimes when communities and physicians don't approve of a change in services, merger plans are dropped.
In July, a proposed merger in Miami between Baptist Health Systems of South Florida and 365-bed Mercy Hospital went bust after Baptist-bowing to physician and community opposition-backed down on a move to ban abortions at all four of its hospitals.
That concession killed the proposed deal with Mercy.
"As long as they continued to do abortions in even one facility, it wasn't possible," says Sister Elizabeth Anne Worley, Mercy's board chairwoman.
In May, another proposed deal unraveled in the Baltimore area. Community concern over the availability of women's reproductive services helped scuttle an affiliation between 304-bed Greater Baltimore Medical Center and 460-bed St. Joseph Medical Center, Towson, Md. (May 11, p. 40).
Among those who opposed the deal were the endowment managers of a former women's hospital-which was one of the facilities that merged in 1965 to form GBMC. They voted to cut off financial support of GBMC if a deal with St. Joseph went through.
Since 1987, the endowment of the former Hospital for the Women of Maryland, of Baltimore City, has given GBMC almost $8 million.
"We're really more of an annoyance to them than a huge financial support," says Cynthia Crawley, president of the women's hospital board.
Crawley says GBMC has a high-profile in vitro fertilization program and other women's services it didn't want marginalized by a merger.
"We said we deeply regret anything that would change women's access, given that it was a women's hospital that helped build GBMC," Crawley says.
A GBMC spokeswoman says abortion services and in vitro fertilization services would have remained available but would have been transferred to a separate corporation as part of the deal.
Putting those services under a new corporate parent would have been "an invisible change" to hospital patients, says Vivienne Stearns-Elliott, a GBMC spokeswoman. Other women's services, such as sterilizations, would not have been affected, she says.
Sterilizations, although not allowed by the Catholic directives, were not at issue in the deal with St. Joseph, says Stearns-Elliott. She says they would have continued at GBMC and didn't need to be segregated with abortion and in vitro programs.
"Despite those reassurances, there were certain women's groups that did not seem to be satisfied with that answer," Stearns-Elliott says.
John Ellis, executive vice president for finance and administration at St. Joseph, says his hospital proposed a joint operating agreement with GBMC. The deal involved no change in ownership, and GBMC was not asked to follow the Catholic directives.
However, the deal did include the corporate carve-out of abortion and some fertility programs because "we could not share in the finances of that," Ellis says.
St. Joseph did not request a carve-out of tubal ligations, because many of those procedures are done in conjunction with Caesarean sections, Ellis says.
"We were going to respect their heritage . . . as a women's hospital," he says.
Ellis says the tubal ligations didn't have to be segregated, because the deal was not a merger.
"That's the big difference," Ellis says. "This was never a merger."
St. Joseph backed away from the deal when GBMC's board couldn't garner enough votes to approve it, Ellis says.
Community involvement. MergerWatch and other advocacy groups are working to raise community awareness about these deals.
They say if communities want to preserve services, they have to get involved before a deal is consummated.
"Once the services are lost, it is virtually impossible to get them restored," Uttley says.
MergerWatch doesn't oppose consolidations in the industry, just the loss of services that can result, she says.
If community activists are successful in getting hospitals to back away from a deal that threatens services, the community must continue to work with the hospitals to find alternative plans.
Uttley says that's what MergerWatch plans to do in New York's mid-Hudson Valley region.
There, community activists are claiming victory in the demise of a three-way hospital deal that would have resulted in a loss of tubal ligations and abortion services.
The deal would have involved 140-bed Kingston (N.Y.) Hospital, 222-bed Benedictine Hospital in Kingston, and 68-bed Northern Dutchess Hospital in Rhinebeck, N.Y.
"We are now going to be working with these community residents to engage in a continuing dialogue with the hospitals to help them chart a future that both protects the viability of the hospitals and ensures the continuation of services the community wants," Uttley says.
MergerWatch has published a guide to help mobilize communities to counter deals that threaten women's services, as has the National Women's Law Center in Washington.
The not-for-profit law center released a guide earlier this summer telling communities how to use antitrust laws to fight mergers they believe threaten services.
Communities can call such deals to the attention of the Federal Trade Commission and the Justice Department. Residents can offer information that is invaluable to these antitrust enforcers about the practical effects of any merger in a community, says Judith Appelbaum, senior counsel for the center.
"Too often, women's healthcare needs are left by the wayside," she says.