Nine of the Cincinnati area's 10 Catholic hospitals would unite under an agreement being negotiated by two healthcare systems.
Cincinnati-based Catholic Healthcare Partners and Albany, N.Y.-based Franciscan Health Partnership last week acknowledged they had signed a memorandum of understanding on Sept. 25 to combine their operations.
A merger would create the fourth-largest Catholic system in the country in terms of net patient revenues, according to MODERN HEALTHCARE's 1998 Multi-unit Providers Survey (May 25, p. 48). The system would have approximately $4 billion in assets and operate 37 hospitals in seven states.
The deal is expected to be completed by late this year or early 1999. It will be subject to the approval of the boards of both systems and their parent organizations.
If completed, Franciscan Health Partnership's owner, Franciscan Sisters of the Poor, would become a co-sponsor of CHP.
Franciscan operates 11 hospitals in Kentucky, New Jersey, New York, Ohio and South Carolina. It also owns nine long-term-care facilities, six home health agencies and other facilities.
CHP, formerly called Mercy Health System, owns 26 hospitals in Kentucky, Ohio, Pennsylvania and Tennessee. It also operates 12 long-term-care facilities, eight senior housing sites and other facilities.
In Cincinnati, where hospital consolidation and cost-cutting has been the order of the day, a merger could better position the Catholic hospitals to compete with the two dominant systems, the Health Alliance of Greater Cincinnati and TriHealth. Franciscan had been in talks with TriHealth earlier this year.
The systems said discussions of potential service changes would be premature. Besides Cincinnati, the systems both operate in the region of southern New York and northeastern Pennsylvania, where they have six hospitals. Franciscan runs 308-bed Good Samaritan Hospital in Suffern, N.Y.; 187-bed Mercy Community Hospital in Port Jervis, N.Y.; and 73-bed St. Anthony Community Hospital in Warwick, N.Y. CHP operates 285-bed Mercy Hospital of Scranton (Pa.); 173-bed Mercy Hospital of Wilkes-Barre (Pa.); and 38-bed Mercy Special Care Hospital in Nanticoke, Pa.
CHP reported net income of $221.9 million on revenues of $2.1 billion in 1997. The figures include St. Elizabeth Medical Center in Covington, Ky., which it acquired in September.
Franciscan posted net income of $13 million on revenues of $973.6 million last year. Its assets were approximately $1 billion, compared with $3 billion for CHP.
CHP has four sponsors: Sisters of Mercy communities in Cincinnati and Dallas, Pa.; Sisters of the Humility of Mary in Villa Maria, Pa.; and Covenant Health Systems in Lexington, Mass.