Officials touting the merger of Louisville's only Catholic hospital and only Jewish health system say it's a savvy pairing of two dissimilar, but complementary Kentucky healthcare providers.
The deal joins Caritas Health Services' Louisville community hospital with Jewish Hospital HealthCare Services, a two-hospital system with a history of high-end medical care.
For Caritas, a subsidiary of Catholic Health Initiatives, the deal delivers access to much-needed capital. Jewish gains access to Caritas' south Louisville market and its larger roster of employed primary-care physicians.
Officials hope to complete the deal in November. The newly formed and unlikely named company, Jewish Hospital & St. Mary's HealthCare, will merge the partners' home health agencies and include Caritas' 437-bed acute-care hospital and 206-bed psychiatric hospital, two Jewish acute-care hospitals and the Frazier Rehab Institute, Jewish's 135-bed neurology and rehabilitation hospital. Jewish will own 75% of the joint venture. CHI will pay $20 million over three years and own the remaining 25% with an option to own up to 50% during the next 15 years.
It also creates a rare union of Catholic and Jewish healthcare providers.
The partners relied on Louisville Rabbi Chester Diamond and Carl Middleton, Catholic Health Initiatives vice president of theology and ethics, to draft terms under which the interfaith merger would operate.
Julian Shapero, Jewish Hospital HealthCare's governing board chairman, said he's unaware of another such joint venture between Catholic and Jewish hospitals that maintains the religious traditions of each. "I think it's historic," Shapero said.
Caritas hospitals will continue to follow ethical and religious directives set by the U.S. Conference of Catholic Bishops, according to the merger's memorandum of understanding. Jewish Hospital HealthCare's "ethical values will not be compromised," it said.
However, the Caritas hospitals will revert to the names they had before the 1994 merger that created Caritas: Sts. Mary & Elizabeth Hospital and Our Lady of Peace.
Caritas began sizing up Louisville health systems for a possible partner in 2003. Recent financial woes left the Catholic provider struggling to upgrade high-technology equipment, expand services, remodel or replace aging buildings, said Alex Waldrop, Caritas' board of trustees chairman. "We didn't have the wherewithal," he said.
Under the merger, the newly formed company will invest $11 million into Caritas each year for five years. Jewish President and Chief Executive Officer Robert Shircliff said a joint venture with CHI gives Jewish access to the expertise and resources, such as group purchasing, of a national health system.
Shircliff has been named president and CEO of Jewish Hospital & St. Mary's.