Mercy Health, Ohio's largest hospital system, to merge with Maryland network

In a merger that could shake Greater Cincinnati’s health landscape, Mercy Health, Ohio’s largest health care system, is joining forces with another major Catholic hospital network based in Maryland.

Few details have been hammered out, such as a name, the leadership and the fate of Mercy's gleaming new Bond Hill headquarters. The deal is expected to close by year’s end.

Mercy Health, which moved into its new building in 2015, is merging with Bon Secours Health System, which has 20 hospitals and 27 post-acute care facilities in Maryland, Virginia, South Carolina, Kentucky, Florida and New York. The system, founded by the Sisters of Bon Secours, is based in Marriottsville, Maryland, and employs more than 24,000 people.

The merger creates the fifth-largest Catholic health system in the country. The combination could mean a regional U.S. medical powerhouse.

A new wave of hospital and health system mergers has been sweeping the nation since bigger systems can have more bargaining power when negotiating rates with insurers. The United States had 115 hospital mergers in 2017, the biggest number since Kaufmann Hall, a suburban Chicago healthcare consulting company, began tracking deals in 2000.

Mercy Health employs more than 33,500 people in Ohio and Kentucky in nearly 23 hospitals along with 26 post-acute facilities. It operates more hospitals in the Cincinnati region than any health system – Jewish, Mercy Health West, Mercy Health Anderson, Mercy Health Clermont and Mercy Health Fairfield.

Officials with Mercy Health’s local competitors offered subdued if any response Thursday to the merger news. Spokesmen with Cincinnati Children’s Hospital Medical Center and St. Elizabeth Healthcare declined to comment. UC Health and the Christ Hospital Health Network did not respond Thursday to requests for comment.

But Mark C. Clement, president and chief executive officer of TriHealth, was sanguine about the prospect for change. The merger “is yet another example of what is occurring in the health care industry regionally and nationally. However, it will likely have little effect on Cincinnati, as health care today is primarily local.”

Craig Brammer, chief executive officer of the regional health education nonprofit the Health Collaborative, called the merger “a logical move for Mercy Health” that will play out on the field of medicine in Cincinnati. “We know across the United States that health systems are aggregating for business reasons for economies of scale and more clout in contract negotiations.”

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In a joint statement, the hospital systems proclaimed the advantages to a merger: The new company would immediately have $8 billion in net operating revenue and $293 million in operating revenue.

“This stronger operating margin allows us to advance our shared ministry and reinvest in community benefit” by almost $2 million a day, the statement said.

The new company would also employ 57,000 people, including more than 2,100 doctors and specialists.

“Further alignment of the ministries offers an opportunity within the United States and outside of its borders to bring healing and hope to those most in need," the statement said.

Maureen Richmond, Mercy Health’s senior director of integrated communications, said the systems’ leaders are working with a merger specialist “to help guide us through decisions and help us get to a final agreement" on a name, leadership and headquarters. "As decisions are made, we will have more information.”

Katherine Vestal, chairperson of Mercy Health Board of Trustees, said: “We are excited about the prospect of two like-minded health systems joining forces to advance our mutual health ministry and improve the health of our communities. The synergistic alignment of our mission and values make this merger a natural fit.”

Sister Patricia A. Eck, chairperson of Bon Secours Ministries, said the merger “ensures a strong future for our shared health ministry as we work to bring health and wholeness to those we so humbly serve.”