Trinity Health Completes Acquisition of MercyOne

Trinity acquires MercyOne’s 16 medical centers and hundreds of care sites. Few hospital deals are underway, but analysts expect the pace to pick up in the near future.

It’s not exactly the busiest time for hospital mergers, but two Midwestern health systems have struck a big deal.

Trinity Health, one of America’s largest Catholic healthcare systems, has completed the acquisition of Iowa-based MercyOne.

Trinity jointly operated MercyOne under an agreement with CommonSpirit, formerly known as Catholic Health Initiatives. In April, Trinity announced an agreement with CommonSpirit to acquire all facilities and assets of MercyOne.

With this agreement, Trinity Health acquires MercyOne’s 16 medical centers and more than 400 care sites. After obtaining regulatory approval, Trinity Health announced that the acquisition was completed on September 1.

MercyOne will retain its name and brand, Trinity Health said.

Mike Slubowski, president and CEO of Trinity Health, said the full acquisition of MercyOne will provide more options for patients.

“For nearly 25 years, we have served communities in Iowa. With MercyOne now fully part of Trinity Health, we are a stronger, more unified system that will enhance MercyOne’s ability to serve our patients, colleagues and communities,” Slubowski said in a statement.

“Healthcare providers across the country continue to face unprecedented challenges brought on by the COVID pandemic, but together we are stronger. With our shared history and Catholic mission, we look forward to continuing a legacy of high quality care for generations to come. »

Trinity, based in Livonia, Michigan, operates healthcare facilities in 25 states. Trinity operates 88 hospitals and hundreds of other healthcare clinics.

Largely due to the COVID-19 pandemic, there have not been many hospital mergers. In the first half of 2022, only 25 hospital mergers and acquisitions were announced, according to Kaufman Hall, a consulting firm. This essentially matches the pace of 2021, when 49 hospital agreements were announced, compared to 79 in 2020.

While fewer consolidations are happening right now, the mergers and acquisitions that are happening involve bigger deals, and that could be a trend to watch, analysts say.

MercyOne’s acquisition by Trinity Health is considered a “mega” deal, with the smaller party having revenues over $1 billion, Kaufman Hall said.

Trinity Health reports $20 billion in annual revenue. MercyOne has $3 billion in revenue, Kaufman Hall noted in a July report on merger activity.

Bob Ritz, President and CEO of MercyOne, said in a statement that the agreement “advances MercyOne’s vision to provide a personalized and radically convenient care experience for Iowans and neighboring communities.”

“We are excited to become a full member of the Trinity Health family, which will contribute to our goal of being a more strongly connected health services system,” Ritz said.

By joining a Catholic system at Trinity Health, Mercy One said the system “will continue to provide health care in a manner faithful to the teachings of the Roman Catholic Church.”

Although the period of hospital mergers has not been good, the acquisition of MercyOne by Trinity Health is the second hospital transaction to close recently.

On September 1, two West Virginia health systems, Charleston Area Medical Center and Mon Health, announced that they had completed their merger. Systems has formed a new organization called Vandalia Health. In this agreement, both organizations will retain the names of their facilities. Systems described the deal as a merger; none of the systems are acquired and no money has changed hands.

Hospital analysts have said they expect to see more hospital transactions over the next year, although the pace only picks up gradually.

Analysts say some hospitals may seek partners to help them in areas where they need specific expertise, such as telehealth or remote patient monitoring. Some hospitals that are in serious financial trouble may have to merge with other hospitals to keep their doors open, experts say.

In the spring, Atrium Health and attorney Aurora Health said they planned to merge and create an organization with $27 billion in annual revenue. If the merger is approved by regulators, analysts said it could spur other major hospitals and health systems to enter into similar deals.

The Federal Trade Commission has opposed several hospital consolidations over the past year. The FTC said it was preparing to block certain deals involving hospitals in competing markets due to concerns about the prospect of higher patient prices and reduced services.

In the planned merger of Atrium and Advocate Aurora, the two systems do not operate in overlapping areas. Atrium, based in Charlotte, North Carolina, operates hospitals and healthcare facilities in North Carolina, South Carolina, Georgia and Alabama. Advocate Aurora, with offices in Downers Grove, Illinois, and Milwaukee, Wisc., operates in Illinois and Wisconsin.

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