Bon Secours Mercy Health Eyes International Hospital Merger Deal

May 06, 2019 - Ohio-based Bon Secours Mercy Health is looking to expand its footprint across the world by engaging in a hospital merger with Ireland’s largest private health system.

On April 30, the Catholic health system announced that it intends to merge with Bon Secours Health System, a five-hospital Catholic health system with approximately 450 providers in Cork, Galway, Limerick, Tralee, and Dublin.

“As consumers across the globe experience a dynamic and ever-changing healthcare marketplace, Bon Secours Mercy Health is committed to expanding its footprint to bring good help to more patients and communities,” John M. Starcher, Jr, president and CEO of Bon Secours Mercy Health, stated in the announcement.

Relatively new, Bon Secours Mercy Health is already one of the largest health systems in the US with 1,000 care sites across seven states, including Ohio, Kentucky, New York, Virginia, South Carolina, Florida, and Maryland.

The health system launched in September 2018 after Ohio-based Mercy Health finalized a hospital merger deal with Bon Secours Health System in Maryland.

Bon Secours Mercy Health leaders engaged in what they called a “combination of equals” to improve the health of entire communities and provide affordable, high-quality care.

The new health system is now aiming to strength its mission by creating an international organization.

“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,” Starcher explained in the announcement. “By sharing best practices and expertise, we will work together to navigate the many complexities of healthcare 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 and Bon Secours Health System are currently working on finalizing a definitive hospital merger agreement. The health systems did not set a specific date to complete the merger, but leaders anticipate completing the deal by the end of the summer pending further diligence and regulatory approvals.

Hospitals and health systems are rapidly expanding. The healthcare industry recently saw a record number of hospital merger and acquisition deals, and the trend is still going strong. Hospitals and health systems announced 27 deals in the first quarter of 2019, consulting firm Kaufman Hall reports.

The providers hope their hospital merger deals can help them succeed in an evolving healthcare landscape in which payments are tied to value, patients are acting more like consumers, and non-healthcare companies are disrupting the market.

The overwhelming majority of the recently announced deals involve hospitals and health systems in the US. But international hospital merger deals are not unheard of.

The Wall Street Journal reported in April 2018 that Ohio-based ProMedica was looking to expand in China in an effort to improve weak revenue growth in the states. Randy Oostra, president and CEO of ProMedica, told the news outlet that increased competition and care shifting outside of the hospital spurred the hospital firm to seek partners in the world’s second-largest economy.

UPMC in Pennsylvania also opened a second radiotherapy center in Italy in October 2018. The cancer centers are now part of one of the largest integrated cancer networks in the US.

The changing healthcare economy in the US is forcing hospitals and health systems to rethink their business models. While completing an international hospital merger deal comes with a unique set of challenges, such as compliance with another country’s laws and integration, the mergers have the potential to diversify revenue streams at a time when inpatient volume is down.