Mercy merger won’t affect Springfield, Urbana hospitals, officials say

Mercy Health — Springfield’s largest employer — will merge with an East Coast hospital network to become one of the largest health systems in the U.S.

The merger with Bon Secours Health system would include 43 hospitals and more than 10 million patient visits annually. The deal won’t affect local facilities, hospital officials said, including Springfield Regional Medical Center and Mercy Health-Urbana Hospital.

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“Our No. 1 job is to put our patients first,” said Maureen Richmond, a spokeswoman for Mercy. “However, the proposed merger creates future opportunities to deepen our commitment to our existing communities and to expand our shared ministry into complementary service areas across the United States.”

Mercy Health, headquartered in Cincinnati, is the largest employer in Springfield. It's also the largest health system in Ohio and among the top five employers in the state, with more than 33,500 employees serving communities throughout Ohio and in Kentucky.

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Bon Secours Health System also is a nonprofit Catholic health system and is sponsored by Bon Secours Ministries. That company operates in Maryland, Virginia, South Carolina, Kentucky, Florida and New York. It owns, manages or maintains joint ventures for 20 hospitals and 27 post-acute care facilities or agencies, including skilled nursing facilities, home care and hospice services, and assisted living facilities.

The deal should be finalized by the end of this year, Richmond said. Teams from both entities will work with a consultant who specializes in mergers to reach a final agreement.

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The new combined entity would be one of the 20 largest health systems in the U.S. and the fifth largest Catholic health system with $8 billion in net operating revenue. It would employ 57,000 associates and more than 2,100 employed physicians and advanced practice clinicians.

“This merger strengthens our shared commitment to improve population health, eliminate health disparities, build strength to address social determinants of health, and invest heavily in innovating our approaches to health care,” said Richard J. Statuto, president and CEO of Bon Secours Health System.

In Springfield, the development of the downtown hospital several years ago was seen as a centerpiece of local efforts to improve health care and spur investment in the city’s core. Local leaders have said that’s paid off with improved medical care, job growth downtown and millions of dollars in new investment that might not have otherwise occurred.

Springfield is one of the few communities of its size nationwide to build a new medical center in a densely populated urban downtown.

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The downtown hospital has paid dividends for Springfield with new jobs and access to care, said retired U.S. Rep. Dave Hobson said. But he’s raised concerns about how much access local leaders and community organizations will have to the health provider’s top leadership if the health system becomes even larger.

“We built this local hospital to serve the community and to provide health care as locally as we can,” Hobson said. “Now I think many people would be frightened that with this merger, it’s going to be even less of a local, caring institution as it gets involved in this huge organization who will have no idea where Springfield, Ohio, is. We want to pass on to the next generation a vibrant place with good quality, reasonably priced health care that has a local understanding of our needs.”

However, Richmond said efficiencies that Mercy and Bon Secours will achieve if the merger moves forward will allow for more local investment and for the new entity to expand its combined health ministry.

“The efficiencies we will achieve will allow us to reinvest resources back into local communities,” Richmond said. “Both organizations are very committed to the communities they serve. In fact, we have a combined community benefit of more than $640 million.”

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The health-care industry is undergoing rapid changes, said Bryan Bucklew, president and CEO of the Greater Dayton Area Hospital Association.

“Everybody is trying to figure out how health care is going to be delivered in the future and how it’s going to be paid for in the future,” Bucklew said. “Some communities are thinking that mergers and partnerships are key and those can manifest themselves in a number of different ways.”

Health-care mergers and acquisitions spiked last year, according to a report by Kaufman, Hall and Associates. About 115 transactions were announced last year, the report says, up about 13 percent compared to 2016. Of those, 11 transactions involved sellers with net revenues of $1 billion or more.

“The cost-cutting mantra of ‘do more with less’ is juxtaposed with a new imperative — ‘do more with more,’” the report says. “As organizations look at what they lack and select strategies for closing the gaps, the response has been strategic partnerships to create broader, richer and more complementary portfolios.”

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The proposal from Mercy and Bon Secours could be beneficial for Springfield, Bucklew said. Both are nonprofit, mission-driven systems with a long history of focusing on community health. As residents live longer, they’re using a wider variety of services more frequently at a time when the health systems are also facing pressures to reign in costs from Medicare, Medicaid and private insurers, he said.

“The bottom line on all of these is how do you become more efficient, how can you become more effective and how can you maintain the service levels in the communities that they serve,” Bucklew said.

The merger might give the hospital greater financial flexibility in the future but that’s unclear at this point, Springfield Mayor Warren Copeland said. It’s not surprising given other medical facilities have consolidated across the country, he said.

“I guess it’s not a surprise, we just didn’t know it was coming,” Copeland said.

In-depth coverage

The Springfield News-Sun digs into important stories about the biggest employers in Clark and Champaign counties, including recent coverage of break-out profits for Navistar and a now-nixed proposal to spin off Speedway.

By the numbers

43: Hospitals in the proposed combined Mercy Health-Bon Secours system

10 million: Patient visits annually to the proposed combined Mercy Health-Bon Secours system

$8 billion: Net operating revenue in the proposed combined Mercy Health-Bon Secours system

33,500: Employees at Mercy Health throughout Ohio and Kentucky, including Springfield and Urbana

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