WASHINGTON (CNS) — Two of the United States’ largest Catholic hospital systems, Michigan-based Trinity Health and Pennsylvania-based Catholic Health East, are exploring a consolidation that one spokesman said benefits from “mission overlap.”
“The principal conversations between the two CEOS have been going on for several months,” said Trinity spokesman Bret Gallaway. “Our boards came together to meet for the first time in July.”
Trinity, itself a merger of hospital systems founded by the Religious Sisters of Mercy and the Sisters of the Holy Cross, and Catholic Health East, which can identify eight co-sponsors — including four provinces of the Sisters of Mercy of the Americas — would form one of the nation’s largest Catholic health systems, and the 10th-largest U.S.-based hospital chain overall, if a consolidation is approved.
Catholic Health East operates in 11 states: Maine, Massachusetts, New York, Connecticut, Rhode Island, Pennsylvania, New Jersey, North Carolina, Georgia, Alabama and Florida. It runs 35 hospitals, 57 long-term care, independent and assisted-living and affordable housing communities, and register nearly 2 million visits to its home health and hospice programs.
In the Philadelphia area, CHE operates St. Mary Medical Center, Langhorne; and Mercy Health System, which runs Mercy Hospital of Philadelphia and Nazareth Hospital in Philadelphia, Mercy Fitzgerald Hospital in Darby, Mercy Suburban Hospital in Norristown and Mercy Home Health Services in Springfield, Delaware County.
Trinity operates in 10 states: Maryland, California, Oregon, Idaho, Nebraska, Iowa, Illinois, Indiana, Ohio and Michigan. It runs 47 hospitals, 32 long-term care, independent and assisted-living and affordable housing communities, and registers 750,000 million visits to its home health and hospice programs.
“We don’t have geographical overlap but we have mission overlap,” Gallaway told Catholic News Service in an Oct. 30 telephone interview from Trinity’s new headquarters in the Detroit suburb of Livonia, Mich.
Eliminating organizational overlap, though, is “one of the opportunities we have to look at as we look at the (consolidated) organization — eliminate the redundancies and overlap and look at the cost structure,” said Clayton Fitzhugh, Catholic Health East’s executive vice president for shared service and its chief human resources officer. “We want to look at the costs and improve the quality of the organization. We’ll be looking at best practices.”
Trinity lists its values as respect, social justice, compassion, care of the poor and underserved and excellence. Catholic Health East identifies as its mission priorities reverence for each person, community, justice, commitment to those who are poor, stewardship, courage and integrity.
More than 87,000 employees, including 4,100 employed physicians, would provide care in the proposed new system. A consolidated entity also would have a combined $13.3 billion in annual operating revenue and provide an estimated $938 million in “community benefit ministry,” meaning care for the poor.
Work between the two systems on a consolidation is expected to produce a plan in the spring.
According to Fitzhugh, it would take 12-18 months after the plan is put into effect before the consolidation could be considered complete.
Gallaway said a merged system would have “a greater duty to transform national health care … and a unified voice in speaking for the poor who are underserved in our country.”
The passage of the Affordable Care Act was not a motivating factor in consolidation talks, according to Gallaway, but “access to health,” including “the broad spectrum of care” has been made “even more evident” by the law’s passage, he said.
Fitzhugh told CNS Nov. 2 that one upside of the consolidation is to be “part of a national health system, a fantastic national system that we hope would be open to others to join us.”