Another powerful Catholic health system, Trinity Health, has been shedding its ancillary business lines.
Trinity, ranked fifth among U.S. Roman Catholic systems by capacity in Modern Healthcares 2005 Hospital Systems Survey (June 12, 2006, p. 24), shed Trinity Design, its tax-exempt architecture subsidiary, in October in a $1.2 million sale and divested a for-profit practice-management consultancy in August 2005. The Novi, Mich., system sold Trinity Design, its $9.1 million architecture and design arm, to HKS, a Dallas-based healthcare architecture firm (Oct. 2, 2006, p. 14).
And Trinity agreed in late December to sell its managed-care plan to Priority Health, a Grand Rapids, Mich.-based HMO owned by three not-for-profit health systems. The deal cleared regulatory review in early April.
In announcing its streamlining efforts, Trinity said the divestitures were part of an effort to review its subsidiaries with an aim to put a greater focus on patient care. We want to make sure that all of our operations align closely with our core business of providing patient care, Stephen Shivinsky, a Trinity spokesman, told Modern Healthcare (March 13, 2006, p. 17).
Subsidiaries jointly owned by not-for-profit healthcare and for-profit partners came under review recently in an ongoing congressional inquiry into tax-exempt healthcares operations. Last fall, Sen. Chuck Grassley (R-Iowa), then the Senate Finance Committee chairman, surveyed joint venture arrangements in his review of governance and community benefits among 10 U.S. not-for-profit hospitals and health systems. Neither Ascension nor Trinity were among those surveyed.
Grassleys probe sought details on how tax-exempt systems oversee assets invested in joint ventures and whether or not subsidiaries co-owned by not-for-profits offer charity care. In responses, released in advance of a mid-September hearing on tax-exempt healthcare, hospitals defended joint ventures as a necessary strategy as developers and physicians become more aggressive competitors. Not-for-profits surveyed rejected an assertion that tax-exempt hospitals willingly partner with for-profits or physicians in order to direct profits from more lucrative procedures to individuals.