Cincinnati-based Bon Secours Mercy Health signed a letter of intent to merge with Ireland's largest private healthcare provider, the health system announced Tuesday.
Dublin-based Bon Secours Health System has five acute-care hospitals in Cork, Galway, Limerick, Tralee and Dublin as well as a long-term care facility in Cork that employs 3,000 workers. No money is changing hands as part of the deal, which is expected to be completed by the end of the summer following the customary approvals, Bon Secours Mercy Health said.
"I am excited that this merger will provide both of our ministries with a platform to Europe and the United States that will amplify our ability to extend our healing ministry and reinvest in the communities we serve," John Starcher Jr., president and CEO of Bon Secours Mercy Health, said in prepared remarks. "By sharing best practices and expertise, we will work together to navigate the many complexities of health care both locally and internationally, and better understand different care delivery models. This will position us well to deliver exceptional care to our patients both today and in the future."
Bon Secours Mercy Health is looking to leverage economies of scale related to information technology support, improved financial systems and supply chain efficiencies, among others.
Bon Secours Mercy Health is open to other expansion opportunities both in the U.S. and abroad, the health system said in an email.
Well-capitalized health systems across the country are planting their flag abroad. They look to expand their brand, capture additional revenue and accelerate the latest clinical innovations. But international expansion also poses large hurdles related to the necessary capital investment and new regulatory landscapes.
"The healthcare sector continues to experience unprecedented change and consolidation, and Bon Secours Mercy Health is committed to expanding its footprint to bring good help to more patients and communities," the health system wrote in an email.
Mercy Health and Bon Secours Health System completed their merger in September, expanding its combined network to 43 hospitals, more than $8 billion in net operating revenue and 57,000 employees.
Over a four-month period following the merger, the health system reported $58.9 million in recurring operating income, which excludes restructuring and integration expenses, on operating revenue of $2.7 billion. With the $95.5 million of one-time costs, its operating income fell to negative $36.6 million. Those losses included an impairment charge on the now-defunct HealthSpan Partners' investment in Summa and merger-related costs.
That compared to $72.9 million in recurring operating income on revenue of $2.69 billion over the same period the year prior. Operating income fell slightly to $68.2 million with $4.7 million of one-time expenses.
Bon Secours Mercy Health had fewer inpatient admissions, deliveries and ED visits but more inpatient surgeries for the four-month period in 2018, which increased pharmaceutical and supply expenses by 4.9%, the company said in its earnings report.
Net income and the net income margin decreased to $353.5 million and negative 15.4%, down from $136.4 million and 5% the year prior, due to investment and one-time losses in December 2018. The health system had 183 days cash on hand and total debt to capitalization of 40.8%, which remained relatively steady from the year prior.