CommonSpirit and Essentia call off 14-hospital deal following nurse complaints

Dive Brief:

  • CommonSpirit Health and Essentia Health have called off a deal for Essentia to acquire 14 CommonSpirit facilities in North Dakota and Minnesota, the two Catholic systems announced Tuesday.
  • The deal, nixed just four months after being announced, would have doubled the size of Duluth, Minn.-based Essentia’s hospital network. One of the facilities up for grabs, CHI St. Alexius Medical Center, is a tertiary hospital and the other 13 are critical access hospitals. The deal would also have included associated clinics and living communities.
  • The systems did not provide details as to why they scrapped the deal in their release, and an Essentia representative did not respond to a request for comment by time of publication.

Dive Insight:

CommonSpirit and Essentia signed a letter of intent in January to explore the sale, but talks have now fizzled following months of deliberation.

“While we share a similar mission, vision, values and strong commitment to sustainable rural healthcare, CommonSpirit and Essentia were unable to come to an agreement that would serve the best interests of both organizations, the people we employ and the patients we serve,” a joint statement from the two systems said.

Earlier this month, more than 700 nurses and medical workers filed a petition noting their concern over the deal. In the petition, the Minnesota Nurses Association and employees at Essentia and CommonSpirit said they feared layoffs and restricted access to patient care resulting from the acquisition.

Nurses cited Essentia’s partnership with Mercy Hospital in Moose Lake, Minn., last summer, which they claimed hurt the quality of patient care.

“Ever since the takeover, we’ve lost numerous staff, causing shortages in how we care for patients,” a nurse wrote in a news release about the petition May 4. “We don’t want CHI’s hospitals and clinics to lay off workers, cut the services they offer or close entirely.”

Essentia did not respond to a request for comment about whether workers’ concerns affected the decision to call off the deal.

Hospitals maintain consolidation betters the patient experience and improves care quality, but numerous studies have suggested that’s not the case. One from early last year published in the New England Journal of Medicine found acquired hospitals actually saw moderately worse patient experience, along with no change in 30-day mortality or readmission rates, while another from 2019 found mergers and acquisitions drive up prices for consumers.

Despite that, provider mergers and acquisitions have continued at a rapid clip even during COVID-19, as hospitals look to divest underperforming assets and bulk up market share in more lucrative geographies. The letter of intent CommonSpirit signed with Essentia suggests the roughly 140-hospital system is taking stock of its smaller rural facilities.

Chicago-based CommonSpirit was formed in 2019 by the merger of nonprofit giants Catholic Health Initiatives and Dignity Health. The nonprofit giant was hit hard by the pandemic, losing $550 million in the 2020 fiscal year.

New Jersey Trinity Health hospital in talks to join Capital Health

N.J. Catholic hospital exploring sale to Capital Health - nj.com

Trenton, N.J.-based St. Francis Medical Center, owned by Trinity Health, has signed a letter of intent to explore joining Pennington, N.J.-based Capital Health.

With the letter of intent signed, the two organizations enter a period of due diligence. The process will determine how best to combine and serve the community. 

The deal would require approval from state and federal officials.

Although St. Francis Medical Center is a Catholic hospital, it would lose that designation under the deal. 

“As a safety-net hospital, ensuring the community has access to care is the heart of our mission,” said Joseph Youngblood, PhD, chair of St. Francis Medical Center’s board, in a May 6 news release. “In response to a broad national transformation of healthcare, we look to combine our strengths with those of Capital, a healthcare leader and grow services for our residents.

Intermountain, Sanford to merge into 70-hospital system

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/intermountain-sanford-to-merge-into-70-hospital-system.html?utm_medium=email

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Salt Lake City-based Intermountain Healthcare and Sioux Falls, S.D.-based Sanford Health have signed a letter of intent to merge. 

The boards of both nonprofit organizations unanimously approved on Oct. 23 a resolution to support moving forward with the due diligence process. Pending regulatory and state approvals, the merger is expected to close in 2021. 

“We’re hoping that the actions taken … just 72 hours ago will culminate in a combined organization next summer,” Kelby Krabbenhoft, president and CEO of Sanford Health, said during an Oct. 26 news conference. 

Existing boards of trustees from both systems will join to form a combined board, and Gail Miller, chair of the Intermountain board, will serve as board chair of the merged organization. 

Marc Harrison, MD, president and CEO of Intermountain, will serve as president and CEO of the combined system, which will operate 70 hospitals and employ more than 89,000 people. Mr. Krabbenhoft will serve as president emeritus. 

“These are two great organizations with strong histories that are economically and clinically very strong,” Dr. Harrison said during the news conference. “This is something that should happen for the future of American healthcare.” 

Intermountain will be the parent company of the combined organization, and the merged system will be headquartered in Salt Lake City. 

Advocate Aurora Health, Beaumont Health end merger plans

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Advocate Aurora Health and Beaumont Health have put an end to their discussions around a potential partnership, officials announced Friday. 

The announcement comes months after the two organizations signed a letter of intent to open discussions.

It also comes after Michigan lawmakersas well as doctors at Beaumont—raised serious concerns about Beaumont, Michigan’s largest healthcare system, becoming part of one of the largest nonprofit integrated health systems in the U.S.

Advocate Aurora has 28 hospitals, more than 500 sites of care and more than 70,000 employees. Beaumont Health is a $4.7 billion health system with eight hospitals and 145 outpatient sites of care and 38,000 employees.

“We continue to have a very high regard for Advocate Aurora Health,” said John Fox, president and CEO of Beaumont Health, in a statement. “But at this time, we want to focus on our local market priorities and the physicians, nurses and staff who provide compassionate, extraordinary care every day.”

Discussions began in late 2019 but were put on hold in the midst of the response to the COVID-19 pandemic, officials said. In April, Beaumont Health temporarily laid off 2,475 workers and cut 450 positions in response to massive financial losses.

However, the two organizations made their letter of intent public in June, saying at the time they wanted to allow further discussions into creating a health system that would span across Michigan, Wisconsin and Illinois.

Leaders from the organizations had agreed to an equal one-third governance representation of any future partnership between Beaumont and both the legacy Advocate Healthcare and Aurora Healthcare organizations, which merged in 2018 to created Advocate Aurora Health. That megamerger formed one of the largest nonprofit health systems in the U.S. with a combined revenue of $11 billion.

“We have great respect for Beaumont Health, and we continue to believe scale will play a critical role in advancing quality, accelerating transformation and reducing cost in the healthcare world of tomorrow,” said Jim Skogsbergh, president and CEO of Advocate Aurora Health, in a statement.

Earlier this year, Beaumont Health called off a potential deal with Akron, Ohio-based Summa Health.

Atlantic Health System to add 8th hospital

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/atlantic-health-system-to-add-8th-hospital.html?utm_medium=email

Health Services in Rockaway, NJ - Morristown - Atlantic Health

CentraState Healthcare System, a single-hospital system based in Freehold, N.J., has signed a letter of intent to join Atlantic Health System, a seven-hospital system based in Morristown, N.J.

Under the agreement, Atlantic Health will become the majority corporate member in CentraState and both systems would hold seats on CentraState’s board.

The systems signed the letter of intent after expanding their oncology and neuroscience clinical affiliation earlier this year.

“We are thrilled to partner with CentraState to support their longstanding commitment to the community and make this investment in the health and well-being of New Jersey’s residents and families,” said Atlantic Health System President and CEO Brian Gragnolati in a news release. “Having worked closely over the past few years with the CentraState team, we feel fortunate for this opportunity to combine our talents and resources to deliver high quality, affordable and accessible care for patients across the state.”

Both systems will now begin the due diligence process and work toward a definitive agreement. 

 

 

 

 

Steward moves to sell struggling Pennsylvania hospital

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/steward-moves-to-sell-struggling-pennsylvania-hospital.html?utm_medium=email

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Dallas-based Steward Health Care has signed a letter of intent to sell Easton (Pa.) Hospital to a local healthcare system, a source familiar with the agreement told The Morning Call.

The document reviewed by the publication suggest that St. Luke’s University Health Network is the likely buyer. Both Steward and St. Luke’s declined to comment.

Last month, Bethlehem, Pa.-based St. Luke’s University Health Network and Allentown, Pa.-based Lehigh Valley Health Network, submitted bids to buy Easton Hospital.

The takeover bids came after Steward said it would cut services to improve the system’s finances.

Easton Hospital has struggled to compete with both St. Luke’s and Lehigh Valley Health for the last five years, according to the report.

On Feb. 12, Steward sent a warning letter to the Lehigh Valley Health to stop recruiting physicians from Easton Hospital, saying they are contractually banned from working at a competing system. This suggests that St. Luke’s bid may have been approved over Lehigh Valley Health, according to the report. 

Read the full report here