As­cen­sion ex­tends Mid­west reach

Mar­ian deal aims to po­si­tion both for re­form

Modern Healthcare - - FRONT PAGE - Ashok Sel­vam

Of­fi­cials from As­cen­sion Health Al­liance said they hope the com­pany’s planned ac­qui­si­tion of Mar­ian Health Sys­tem will suc­cess­fully pair Mar­ian’s strong brand across four states with the coun­try’s largest Ro­man Catholic provider to bet­ter po­si­tion the two for health­care re­form.

“They’re pretty ge­o­graph­i­cally dis­persed with a num­ber of clin­ics,” As­cen­sion Health Al­liance Pres­i­dent and CEO An­thony Ter­signi said of Tulsa, Okla.-based Mar­ian. “We be­lieve they’re well-po­si­tioned for pop­u­la­tion health man­age­ment in the near fu­ture.”

The par­ties an­nounced the pro­posal last week. St. Louis-based As­cen­sion al­ready had a re­la­tion­ship with Via Christi Health, Mar­ian’s six-hospi­tal division in Wi­chita, Kan., af­ter buy­ing a 50% share in 2007. Adding all 27 of Mar­ian’s hos­pi­tals to As­cen­sion’s 76 to cre­ate a 103hos­pi­tal sys­tem made sense: “This was a nat­u­ral ex­ten­sion of a good part­ner­ship,” Ter­signi said.

The move also in­cludes Mar­ian’s more than 150 clin­ics across Kansas, Min­nesota, Ok­la­homa and Wis­con­sin. This marks an ex­pan­sion into new ar­eas for As­cen­sion, as its only hos­pi­tals in Mar­ian’s four states are three in Wis­con­sin. Mar­ian’s three di­vi­sions in­clude the afore­men­tioned Via Christi, the 15 hos­pi­tals of Min­istry Health Care in Mil­wau­kee and the six hos­pi­tals of St. John Health Sys­tem in Tulsa.

The sys­tems did not dis­close the sales price but did say As­cen­sion will as­sume Mar­ian’s debt—which Mar­ian of­fi­cials es­ti­mate to be about $1.4 bil­lion—as part of the deal. The two Ro­man Catholic providers plan to com­plete the deal by the end of the first quar­ter of 2013.

No fis­cal emer­gency prompted the deal, said St. John Pres­i­dent and CEO David Pynn. Af­ter post­ing a $73.3 mil­lion net loss in fis­cal 2008, Mar­ian saw its net in­come bounce back, with the past three years end­ing in the black, ac­cord- ing to fi­nan­cials posted on its web­site. The sys­tem earned net in­come of $149.9 mil­lion in fis­cal 2011, and both Ter­signi and Pynn lauded the sys­tem’s fi­nan­cial per­for­mance.

“My ob­ser­va­tion is over a num­ber of years the sis­ters had the fore­sight and vi­sion to un­der­stand the need to be­come big­ger and strong, if you will,” Pynn said. “I also think they were look­ing for the ideal sit­u­a­tion and ideal part­ner.”

Larger sys­tems will continue to ac­quire smaller ones, Pynn said. Ter­signi men­tioned As­cen­sion’s con­tin­ued talks to ac­quire the six-hospi­tal Daugh­ters of Char­ity Health Sys­tem in Los Al­tos Hills, Calif. The two signed a mem­o­ran­dum of un­der­stand­ing in March (April 2, p. 20): “We’re hop­ing we can bring that into fruition by the end of the year,” Ter­signi said.

The in­crease in scale surely makes im­ple­ment­ing pop­u­la­tion health strate­gies eas­ier, said Dr. An­thony Shih, ex­ec­u­tive vice pres­i­dent for pro­grams at the Com­mon­wealth Fund, a health pol­icy foun­da­tion. But en­sur­ing smooth co­or­di­na­tion of care be­tween the two newly con­nected par­ties should be a pri­or­ity. For in­stance, ad­min­is­tra­tors should take great care in en­sur­ing health in­for­ma­tion tech­nol­ogy sys­tems work to­gether prop­erly.

“I think the most im­por­tant is­sue is it can’t just be fi­nan­cial in­te­gra­tion, it has to be clin­i­cal in­te­gra­tion in mak­ing sure the en­ti­ties that you’re bring­ing to­gether have co­or­di­nated care be­tween the var­i­ous providers,” Shih said.

Shih placed the onus on the sys­tems’ lead­er­ship in cre­at­ing a uni­fied vi­sion and strat­egy. The new part­ners should share the same goals when it comes to trans­parency, ac­count­abil­ity and qual­ity im­prove­ment.

“It’s a long, dif­fi­cult process,” Shih said. “I can’t speak to how fast or slow it will take.”

Last month, the CMS se­lected the greater Tulsa re­gion for its Com­pre­hen­sive Pri­mary Care Ini­tia­tive (Aug. 27, p. 14). The pro­gram could launch in Tulsa in Oc­to­ber. The deal would give As­cen­sion a foothold in the pro­gram with the ac­qui­si­tion of St. John: “I think this isn’t only a one-sided re­la­tion­ship with As­cen­sion where we’re the only one that’s go­ing to ben­e­fit,” Pynn said.

Re­form had al­ready trig­gered a change in spon­sor­ship at Mar­ian’s Me­nasha, Wis.based sub­di­vi­sion, which is part of Min­istry Health Care. Affin­ity Health Sys­tem’s three hos­pi­tals an­nounced in Fe­bru­ary a change to a sole spon­sor­ship with an eye on the for­ma­tion of an ac­count­able care or­ga­ni­za­tion. Hav­ing As­cen­sion in­volved will only en­hance any fu­ture tran­si­tion to an ACO, Ter­signi added. The Sis­ters of the Sor­row­ful Mother or­der is the sys­tem’s sole spon­sor. Pre­vi­ously, Wheaton Fran­cis­can Health­care, Glen­dale, Wis., co-spon­sored those hos­pi­tals.

The de­creased num­bers of the Sis­ters of the Sor­row­ful Mother’s or­der served as a driver of the deal. There are now only 109 sis­ters in the U.S. and Caribbean, with 23 in­volved in health­care. Af­ter the deal is fi­nal, Mar­ian would switch spon­sor­ship to As­cen­sion Health Min­istries.

“I don’t think there’s a dan­ger of (Catholic care) go­ing away, but what we’re see­ing, just in gen­eral across the coun­try, is as health­care re­form comes up, as in our case, the sis­ters at SSM aren’t get­ting any younger,” Pynn said. “Our unique sit­u­a­tion is that by com­bin­ing with a big­ger or­ga­ni­za­tion, we’ll have more Catholic re­sources and part­ners. It’s just a good fit.”

As­cen­sion saw a sim­i­lar op­por­tu­nity late last year when it ac­quired three-hospi­tal Alex­ian Broth­ers Health Sys­tem, Ar­ling­ton Heights, Ill. Pre­serv­ing the Alex­ian or­der, which has its roots in the early 12th cen­tury, makes the Alex­ian Broth­ers sys­tem at­trac­tive to As­cen­sion. The dwin­dling or­der now counts only 33 mem­bers left in the U.S. and the Philippines.

The deal to ac­quire Mar­ian is about more than ex­pan­sion.

“It’s re­ally fo­cus­ing on strength­en­ing Catholic health­care, and we’ve been part­ners with their min­istry in Wi­chita,” Ter­signi said. “And so we re­ally got to know them.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.