A long-awaited move by the bishop resulted in checkmate for a proposed hospital merger in Lowell, Mass.
The Archdiocese of Boston's rejection of a proposed joint operating company "destroyed the basic foundation" of the planned merger between Roman Catholic Saints Memorial Medical Center and Lowell General Hospital, said Robert Donovan, Lowell General's chief executive officer. Cardinal Bernard Law opposed the two hospitals' plan because Lowell General would have had a majority of the new governing board's seats.
The merger agreement between Lowell's only two hospitals called for Lowell General to abide by Catholic healthcare rules in exchange for an 8-7 majority on the new joint governing board. The pact between the two hospitals was struck in early summer after six years of on-again, off-again negotiations, but rejected by the archdiocese six weeks ago.
Saints Memorial is affiliated with Sisters of Charity of Ottawa.
Donovan said the merger would have saved the hospitals a combined $5 million a year. In their most recent fiscal years, 231-bed Lowell lost $7 million on $105 million in revenue, while 150-bed Saints Memorial earned $1 million on $85 million in revenue.
To comply with Catholic rules on reproductive services, Lowell General agreed to create a separate corporation and facility to perform tubal ligations and sterilizations. The hospital does not perform abortions.
The merger also would have needed approval from the state, but antitrust issues were not seen as an obstacle, according to Donovan and Thomas Clark, Saints Memorial president and CEO. The two hospital chiefs said Lowell's proximity to Boston, (Lowell is about 25 miles northwest of the city), means the merger would not have led to a monopoly because of the nearby competition.
Both sides say further efforts to push the merger are now unlikely.
"The problem is not with Saints Memorial itself, but rather the problem is the church," Donovan said. "We know the church isn't going to change its mind very quickly and I think it is going to be difficult to get it on the table in the foreseeable future."
Clark said Lowell General always was aware that the two hospitals would ultimately need to satisfy the church to accomplish the merger. Clark said he was "disappointed" that Lowell General is not willing to continue merger discussions.
The city also accepts that a merger is now unlikely. "I think the task now is to make sure that both hospitals continue to offer the best healthcare as possible," said John Cox, Lowell's city manager.
Lowell General will implement a financial turnaround plan immediately, Donovan said. The plan, which he would have put in place even if the merger had gone through, will rely on cutting overhead and maximizing revenue, but will "not necessarily" include layoffs.
The archdiocese declined to comment.