— The parent company of Saint Francis Hospital and Medical Center announced Wednesday it plans to become a part of Trinity Health of Livonia, Mich., a large Catholic health care system that operates 86 hospitals in 21 different states.
The arrangement would allow Saint Francis Care to maintain a Catholic culture while shifting hundreds of millions of dollars in debt, and financial obligations of its employees’ pension plans, to a much larger health system.
Saint Francis Care would benefit from being a part of a large health system that has greater bargaining power when negotiating rates with insurance companies, as well as bulk purchasing power for medical supplies.
The agreement must be approved by state and federal regulators. The hospital’s parent company, Saint Francis Care, plans to submit a “certificate of need” in January with state regulators.
If regulators approve the agreement, Trinity Health has agreed to invest at least $275 million over five years to support health-care needs through capital projects in the new region.
“Our board is ecstatic about this because we’ve really looked long and hard for the perfect partner, and it couldn’t be more perfect, I think,” Saint Francis Care CEO and President Christopher Dadlez said in an interview.
In 2013, Trinity Health absorbed Catholic Health East of Newtown Square, Pa., to create one of the nation’s largest Catholic health systems with a total of $19.3 billion in assets at the time. That transaction included The Mercy Community of West Hartford as well as hospitals in Ohio, Pennsylvania, California, New Jersey, Upstate New York, Georgia, Delaware, Idaho, Rhode Island, Alabama and elsewhere.
The Vatican also must approve the Saint Francis agreement because a Catholic entity would transfer from one organization to another within the umbrella organization of the Catholic church. It’s a transfer from one “sponsor” to another within the Catholic church. The Archdiocese of Hartford approved the transaction, and would no longer be the sponsor, handing over those responsibilities to Catholic Health Ministries of Livonia, Mich.
When Trinity Health acquires hospitals, the ownership is transferred to Catholic Health Ministries, a type of Catholic sponsor called a “public juridic person” in Catholic Canon law.
“As a system, we have a pretty strong presence on the Eastern Seaboard,” said Scott Nordlund, executive vice president of Growth, Strategy and Innovation for Trinity Health. “But we don’t really have a presence, or didn’t really have a presence, in Connecticut to strengthen our ability to best serve people, communities, the region, in general, as we think about population health management.”
Saint Francis benefits from Trinity Health’s size.
Nordlund said Trinity Health will look to improve efficiency and costs at Saint Francis Care with its size. Some logical examples might be IT services, reduced costs in supplies and other back-office support.
Nordlund said he doesn’t anticipate changes to employees benefits or in the number of employees employed.
“I wouldn’t say that they would never happen, but I think right now what we’re focused on is investment in the community there for growth. So, we’re thinking much more along those lines,” Nordlund said of changes to employees’ benefits and staffing.
Unlike proposals by Tenet Healthcare Corp. of Dallas, Texas, to buy five Connecticut hospitals, the Saint Francis agreement would not convert a hospital from a non-profit to a for-profit entity. Saint Francis Care will remain non-profit. Last week, Tenet pulled its applications to buy the Connecticut hospitals after the state Office of Health Care Access set strict guidelines around a proposed transaction with Waterbury Hospital.
As part of the new arrangement, Trinity Health would create a new regional health system with Saint Francis Care and Sisters of Providence Health System of Springfield, Mass., which includes Mercy Medical Center. Sisters of Providence Health System and Mercy Medical Center were a part of Catholic Health East that joined Trinity Health last year.
Dadlez, the Saint Francis CEO, will oversee the new “regional ministry. Daniel P. Moen will continue to serve as president and CEO of Sisters of Providence Health System and he will play a significant role in forming the new regional system, the hospitals said.
“There will be a regional board that oversees everything in this New England market that we’re developing, and I’m assuming we’ll grow,” Dadlez said in a phone interview.
Trinity Health had annual revenue of $13.6 billion during fiscal year 2014, compared with Saint Francis Care’s $783.3 million in revenue and Sisters of Providence Health System’s $341 million in revenue.
Trinity Health also owns 128 non-acute facilities, such as long-term care, assisted living, independent living and affordable-housing communities. The health system sees this market as a huge growth opportunity as the Baby Boomers age, said Nordlund, the Trinity Health executive vice president.
Saint Francis Care is a 617-bed hospital with 4,158 employees, including 780 physicians and 166 residents.
The merger with Trinity Health would affect Saint Francis Hospital and Medical Center; Mount Sinai Rehabilitation Hospital on Blue Hills Avenue in Hartford; the Connecticut Joint Replacement Institute; Saint Francis G.I. Endoscopy; the Curtis D. Robinson Men’s Health Institute; the Greater Hartford Children’s Advocacy Center; and New Directions, an out-patient facility in Enfield that provides drug and alcohol treatment.
The new entity will maintain affiliations with Masonicare Partners Home Health and Hospice, Inc., and a partnership of 700 physicians, called Saint Francis HealthCare Partners.
The deal doesn’t include Johnson Memorial Medical Center in Stafford Springs, which signed an affiliation agreement with Saint Francis in 2012.
“We’re working on Johnson Memorial coming under our umbrella in this near future, too,” Dadlez said.
Copyright © 2014, Hartford Courant
Saint Francis Plans To Merge With Large, Catholic Hospital System
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