Trinity Health, Livonia, Mich., struck a definitive agreement to acquire St. Joseph's Hospital Health Center in Syracuse, N.Y. The health system previously negotiated with the New York hospital but failed to reach a deal.
For Trinity Health, the acquisition would increase its share of a major market. St. Joseph's, which would join dozens of hospitals Trinity operates across the U.S., would gain access to the national system's capital. Trinity Health became one of the nation's largest health systems after its merger with Catholic Health East two years ago.
New York state is Trinity Health's fourth-largest market, accounting for 9% of the system's revenue last year.
Trinity Health first announced plans to acquire the 451-bed New York hospital in July 2013, but the deal crumbled after months of due diligence. Instead the prospective partners entered a “strategic affiliation.”
"At the time, Trinity Health's focus was its integration with new hospitals, systems and colleagues following its consolidation with Catholic Health East, and the new organization had yet to bring in a permanent CEO or establish a system strategic plan," said Trinity spokeswoman Eve Pidgeon. "The decision, and the affiliation agreement, allowed Trinity Health and St. Joseph's to continue working together in a meaningful and strategic manner while we worked through those key processes."
Construction and electronic health-record investments strained St. Joseph's already weak finances last year. The system opened a new 72-bed tower in September. It ended 2014 with an operating loss of $2.7 million on revenue of $579.6 million, in part because of $19.4 million in unusual or one-time costs related to training and installation of its EHR system, the system's financial statements said.
St. Joseph's ended 2013 with an operating income of $20.5 million on revenue of $564.8 million.
“This will enhance St. Joseph's ability to compete in an increasingly dynamic healthcare environment,” St. Joseph's CEO Kathryn Ruscitto said in a news release announcing the deal.
Trinity Health has announced multiple deals recently, including a joint venture with the California managed-care network Heritage Provider Network.
