OSF HealthCare Pursues Hospital Merger with Local System

July 26, 2019 - Peoria, Illinois-based OSF HealthCare and Evergreen Park, Illinois-based Little Company of Mary Hospital and Health Care Centers recently announced talks surrounding a full hospital merger.

The July 17 announcement stated that the two Catholic health systems have entered a period of exclusive negotiations, and leaders will spend the next few months finalizing an agreement and seeking the necessary regulatory and canonical approvals.

“As health care continues to evolve, we have the responsibility to ensure that we are planning for the future – both in terms of technology and innovation as well as preserving Catholic health care,” John Hanlon, MD, MMM, president and CEO of Little Company of Mary Hospital and Health Care Centers said in the announcement. “OSF HealthCare is a leader in transforming health care, and we believe our firm foundation of faith and collective sense of purpose and mission will allow for sustained quality, coordinated care and innovation.”

OSF HealthCare currently runs 13 acute care hospitals, 18 urgent care centers, 11 centers for health, and two colleges of nursing in Illinois and Michigan, employing about 1,300 providers. Little Company of Mary Hospital and Health Care Centers is a single hospital system with 11 health centers and 2,100 employees.

Little Company of Mary Hospital and Health Care Centers pursued another merger deal with Rush in 2017. But the organizations mutually agreed to halt merger talks a year later, according to local news sources.

READ MORE: Mega Mergers Behind Recent Hospital Merger and Acquisition Activity

The latest hospital merger deal will bring together OSF HealthCare and Little Company of Mary Hospital and Health Care Centers to advance technologies and develop new capabilities, the announcement stated. The deal will also allow the systems to “share services, develop and expand academic partnerships, and create strategies to meet the unique needs of various populations.”

“Partnership development, particularly with other mission-driven organizations, is a key component of how we are successfully responding to the call to share our Ministry,” said Bob Sehring, CEO of OSF HealthCare. “We have long admired the strong Catholic heritage and commitment to the gift of life demonstrated by Little Company of Mary, and believe that together, we can create better health and deliver value for our communities.”

The health systems expect to complete the hospital merger in early 2020.

Care New England ends merger discussions

Care New England (CNE) announced on July 16 that the system is no longer pursuing a hospital merger deal with Rhode Island’s largest health system, Lifespan, and Brown University.

The governor of Rhode Island requested CNE discuss a deal with Lifespan and Brown University after Boston, Massachusetts-based Partners HealthCare expressed interest in merging with the three-hospital system in 2018. The governor felt a locally run health system would better serve Rhode Island residents.

READ MORE: How Hospital Merger and Acquisition Activity is Changing Healthcare

But ultimately, CNE’s board voted to withdraw from tri-party hospital merger discussions over a month later.

“In making this decision, the Board took into account many considerations, including but not limited to, capital requirements and financial stability of the combined system, community need, anti-trust considerations, organizational stability, and implementation risks,” stated Charles R. Reppucci, chair of the CNE Board of Directors, and James E. Fanale, MD, president and CEO of Care New England.

Fanale and Reppucci went on to explain that CNE has undergone significant improvements and the health system plans to continue providing care to its communities independently. However, the health system is open to new opportunities in the future.

The existing collaborations with Lifespan and Brown University will continue.

Four health systems partner to aid bankrupt children’s hospital

Four Philadelphia-based hospitals recently teamed up to negotiate the acquisition of St. Christopher’s Hospital for Children, a local hospital owned by the American Academic Health System that filed for bankruptcy earlier this summer.

READ MORE: Major Healthcare Mergers and Acquisitions Making Waves in 2019

Einstein Healthcare Network, Jefferson Health, Philadelphia College of Osteopathic Medicine (PCOM), and Temple Health announced on July 17 that the four systems formed a consortium to save the 188-bed teaching hospital and its assets.

St. Christopher filed voluntarily for Chapter 11 bankruptcy reorganization along with another hospital owned by the American Academic Health System, Hahnemann University Hospital.

“In a time of difficult transition for health care in Philadelphia, four healthcare organizations stepping up to do what’s right by St. Christopher’s patients is truly emblematic of neighbors helping neighbors,” Achintya Moulick, MD, MCh, MBA, chief medical officer at St. Christopher said in the announcement. “This will ensure continuity of care and service to the children of the community it serves, especially the underserved population.”

Einstein Healthcare Network’s president and CEO, Barry R. Freedman, said acquiring the hospital is essential to preserving access to care in the community.

"We understand the significance of their presence in an area of Philadelphia that already has limited access to quality healthcare services for children,” he said. “It is Einstein's obligation to step forward, along with our colleagues at Temple, Jefferson and PCOM to save this precious asset. As one voice, this group of community-minded, mission-driven healthcare organizations will do what we can to keep St. Christopher’s open, to continue serving those most in need, those most vulnerable and those most underserved, Philadelphia's children."

The four health systems singled out the emergency department at St. Christopher as a major reason for acquiring the hospital. The emergency department is one of the busiest in the nation, the consortium said.

The acquisition would also save the network of primary care specialty care locations throughout Philadelphia’s suburbs and New Jersey, the announcement stated.

The consortium plans to submit a letter of intent to American Academic Health System soon.