SYRACUSE, N.Y. — St. Joseph’s Hospital Health Center will join Livonia, Michigan.–based Trinity Health, as part of an agreement the two organizations signed Tuesday.
Trinity Health on its website describes itself as “one of the largest multi-institutional Catholic health-care delivery systems in the nation.”
The decision “builds” on a “strategic-affiliation” agreement the organizations signed in early 2014, the organizations said in a joint news release.
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Trinity Health will replace the Sisters of St. Francis of the Neumann Communities as the local, nonprofit sponsor of St. Joseph’s, Kathryn Ruscitto, president and CEO of St. Joseph’s, says in an interview.
“We were not bought. We were not acquired. That’s not what this is. This is a change in sponsorship,” she explains, regarding the new arrangement.
The transition will result in “no changes” for physicians, St. Joseph’s employees, and patients, according to the joint news release.
St. Joseph’s currently employs 4,395 people.
“As part of our People-Centered 2020 strategic plan, Trinity Health is committed to being a leader in strengthening Catholic health care locally and nationally,” Dr. Richard Gilfillan, president and CEO, Trinity Health, said in the joint release. “Our two organizations are aligned in our faith-based mission, vision and values. St. Joseph’s membership in our system will enable Trinity Health to further extend people-centered care to more patients in New York.”
The U.S. Federal Trade Commission still has to approve the agreement, which should happen in the early part of the summer, according to Ruscitto.
St. Joseph’s is filing paperwork under the federal Hart-Scott-Rodino Act to prove the arrangement won’t have any anti-competitive effects in the health-care marketplace.
The agreement will have no impact on the hospital’s local management, but Trinity will have to hire any future CEOs, appoint future board members, and approve major capital projects, in the same manner as the Sister of St. Francis has done, says Ruscitto.
St. Joseph’s will pay an annual system fee as a member of Trinity Health, but the amount of the fee has yet to be determined and will take about a year to figure out, says Ruscitto.
“That fee is far offset by the benefits that we get,” she contends.
St. Joseph’s and Trinity Health will next establish a transition team, which will include leaders from both organizations.
The group will manage regulatory approvals and identify other specific tasks to ensure a “smooth” transition, including identifying ways to keep the community, physicians, employees, donors, and volunteers updated on the process, the organizations said.
Similar sponsor
Trinity Health is “very similar” to the Sisters of St. Francis because it has the “same mission and values” as St. Joseph’s. The Sisters of St. Francis, whose members are “aging,” had planned for the hospital to become independent or to affiliate with another organization eventually, says Ruscitto.
Besides preserving St. Joseph’s mission as an organization, the agreement with Trinity improves “quality and evidence-based care,” and provides access to financial resources, , Ruscitto contends. The relationship with Trinity Health gives St. Joseph’s “access to best practices.”
Trinity Health includes 215 organizations nationwide, which can provide the “best, evidence-based care” for conditions, such as Ebola, and it shares the information within the organization.
Ruscitto also contends the agreement with Trinity Health will provide St. Joseph’s with “financial stability.”
“There [are] all kinds of financial benefits that will accrue to us related to access to capital that just really insures our future,” says Ruscitto.
St. Joseph’s says it generated $641.7 million in revenue in 2014. The hospital also lost more than $21 million last year.
Some of the factors that led to the loss included “one time” costs related to the installation of a new electronic medical-record system and additional matters related to opening its new patient tower, says Ruscitto.
Search for sponsor
St. Joseph’s about five years ago started watching a national trend, seeing Catholic hospitals in many places either close or join larger systems.
“We started to look deeper and found … those hospitals that were in systems were doing better. Better quality outcomes, more stable finances, developing regional systems,” says Ruscitto.
She cited Buffalo’s Catholic Health system and St. Peter’s Health Partners (a three hospital regional system) in Albany as examples of accountable-care organizations in New York.
St. Joseph’s started exploring possible organizations, such as Newtown Square, Pennsylvania–based Catholic Health East (CHE), which has since merged with Trinity.
The local hospital on July 9, 2013 had also announced an “intent to align” with CHE Trinity.
CHE Trinity formed in 2013 when Catholic Health East and Trinity Health merged, according a news release from St. Joseph’s.
The Michigan.–based entity has since changed its name to Trinity Health.
When CHE joined with Trinity, their search for a permanent CEO was ongoing at the same time St. Joseph’s announced its intention to align with Trinity.
“We decided it was … too complicated at that point in time and that we would push the pause button and affiliate [with Trinity,]” says Ruscitto.
That meant St. Joseph’s would take advantage of some services, allowing more time for Trinity to find a CEO and give the situation more thought.
Trinity Health on Oct. 29, 2013 announced the hiring of Dr. Gilfillan as its new CEO, according to a news release on the Trinity website.
With the new CEO in place, St. Joseph’s felt comfortable moving forward.
“We felt now was the right time. We have completed all the negotiations,” says Ruscitto.
Contact Reinhardt at ereinhardt@cnybj.com
