Bishop Taylor has 'serious reservations' about Mercy Health selling Hot Springs hospital

Published: April 25, 2012

St. Joseph Mercy Medical Center, which is set to become Mercy Hospital Hot Springs beginning April 30, is in discussions with the owner of National Park Medical Center to transfer ownership.

On April 23, it was announced that for-profit Capella Healthcare, parent of National Park Medical Center, and Mercy Health, sponsors of St. Joseph Mercy Health System, signed an Agreement in Principle, which "contemplates transferring ownership" of St. Joseph to Capella and allows the "two organizations to engage in exclusive negotiations toward a definitive agreement."

"As separate providers in the Hot Springs area, Mercy and Capella face challenges in serving the community," said Lynn Britton, Mercy president and CEO. "Mercy has deep roots in the region, and it is our intent to continue our ministry here through other ways of meeting community needs. But given the environment, we have come to believe that the region will be better served by a unification of health services under one provider."

"This agreement reflects our shared core values to provide high quality, cost-effective, compassionate health care for the regions we serve," said Dan Slipkovich, chief executive officer for Capella Healthcare. "With great challenges related to health care reform and a continued uncertain economy, we have to be better and smarter about how we deliver health care going forward. We believe a more coordinated system will pave the way for improved quality and greater efficiencies in how we provide care."

Bishop Anthony B. Taylor issued a statement April 24 stating he has "serious reservations" about the possible sale. He said he was not informed before the agreement was signed, which could be a violation of the Ethical and Religious Directives for Catholic Health Care Services.

"The diocese first learned of this agreement last Friday and although we have just begun to research the matter, we already have serious reservations about it due to the negative impact this purchase could have on the medical care available to the poor and on the Hot Springs community in general," the bishop said. "St. Joseph Mercy Medical Center has long been the primary provider for the poor in the six-county area it serves -- even though this has resulted in a less lucrative 'payer mix' than is usually the case with for-profit hospitals, particularly those which rely on private equity funding for whom return on investment is often the driving force."

The bishop said he understands St. Joseph takes care of a "disproportionate share of the poor," but said "that is part of the mission of any Catholic hospital."

"For this and other reasons, such as concern for the protection of the unborn, procedures for sterilization and the welfare of the elderly poor, the Diocese of Little Rock is presently quite skeptical regarding the acceptability of this proposed sale," he said. "As bishop of Little Rock I am responsible for ensuring that the Church fulfills its responsibility to protect and serve those who are most vulnerable. Moreover I am also concerned about how this sale will affect those whom the Sisters of Mercy have served so faithfully throughout their ministry at St. Joseph Mercy Medical Center regardless of profit or loss."

In response to Bishop Taylor's statement, Mercy Health issued a statement saying Capella will care "for everyone regardless of ability to pay."

"We are asking Capella to assure the continued care for people who are poor, along with giving careful attention to the well being of St. Joseph's community of co-workers and physicians," Mercy Health said.

Mercy Health said it was aware there is a "redundancy of duplicated services currently existing in Hot Springs" and hopes the "newly created model will bring better capacity not only for serving the Hot Springs community, but especially those who are poor."

If the sale is approved, the Sisters of Mercy will create an endowment fund and continue to operate the Cooper-Anthony Mercy Child Advocacy Center, which was founded in 2003 to assist children who are abused and neglected.

St. Joseph Mercy Medical Center said there is a trend of hospitals merging around the country. In 2011 there were 100 agreements reached, the hospital said.

"Of course, there are a number of issues and opportunities that will need to be fully explored, and we will spend the next several weeks engaging physicians, employees and community leaders to help us shape what's best for the region and to build on the work already underway," Slipkovich said.

Mercy and Capella said they would not offer any more details until a "definitive agreement" was reached.

"As we work towards finalizing our agreement, both organizations are committed to making the transition as smooth as possible for patients, employees, physicians and the community as a whole," Britton said.

St. Joseph Mercy Medical Center is the oldest and larger of the city's two hospitals. St. Joseph has 282 beds and is the only Level II trauma center in southwest Arkansas. It was established in 1888. National Park Medical Center, a 166-bed, acute-care facility, has been opened since 1954.