The Sisters of St. Joseph Health System, turned out to be a lucrative merger partner for the Daughters of Charity National Health System, St. Louis.
Since the two merged last year to create Ascension Health, the four regional systems in Michigan formerly operated by the Sisters of St. Joseph have added to Ascension's bottom line, according to financial data recently released by Ascension.
Three of the four regional systems in the Michigan cities of Flint, Kalamazoo and Tawas City each contributed up to $5 million in operating profit, while regional operations in Detroit added more than $5 million in the fiscal year ended June 30.
The four regions encompass 21 acute-care hospitals, including 369-bed Providence Hospital and Medical Centers, Southfield, Mich., a former Daughters of Charity facility, said Anthony Tersigni, senior vice president of Ascension's Great Lakes division.
As a system, Ascension has 71 owned or affiliated hospitals. Of those, the Sisters of St. Joseph owned 13 hospitals, said an Ascension spokeswoman.
In addition to the profitable operations in Michigan, 13 other regional Ascension health ministries had profitable operations in the recently ended fiscal year.
However, Ascension operations in 10 other regions lost money, including some that lost more than $10 million.
As a system, Ascension lost $31 million on operations on total operating revenue of $6.2 billion in its first fiscal year. However, much of the loss was due to $41 million in restructuring and other one-time charges, including the termination or renegotiation of physician contracts (Oct. 30, p. 3).
Overall, Ascension enjoyed total profits of $199 million on total revenue of $6.4 billion in the recently ended fiscal year.
The favorable performance of the former Sisters of St. Joseph operations came as no surprise to Tersigni, who previously was president and chief executive officer of the Sisters of St. Joseph's St. John Health System, Detroit.
Tersigni said the former Sisters of St. Joseph system had reacted early to reimbursement pressures imposed by the federal government under the Balanced Budget Act of 1997 by closely reviewing their operations and making needed changes.
"I never viewed us as taking them (the Daughters) down," Tersigni said.
Pat Murtha, president and CEO of 49-bed St. Joseph Health System, Tawas City, Mich., said the Sisters of St. Joseph facilities have "proven over the years that they have strong leadership and are able to compete and maintain financial strength in a very competitive environment."