The Towson hospital's owner, Catholic Health Initiatives, put it up for sale after a surgical scandal threatened its business and besmirched its reputation.
St. Joseph's said that all the hospitals it is negotiating with have agreed to honor its "Catholic identity." However, citing confidentiality agreements as talks continue, hospital officials won't clarify what that means.
The conflict between religious and secular ownership in merging hospital groups has raised questions and even killed deals.
St. Joseph itself was at the center of such discord in the 1990s when it shelved merger talks with Greater Baltimore Medical Center because of an outcry from women's groups that feared the deal would curtail abortions and other reproductive services. More recently, Kentucky Gov. Steve Beshear turned down a chance to merge a public hospital in Louisville with Catholic Health Initiatives after public opposition that the deal would have led to fewer women's services such as contraception.
More of these partnerships are taking place despite the complexities as the hospital industry continues to consolidate. Smaller systems facing competitive pressures and the uncertainty of health care reform are looking to become part of larger, financially sound institutions.
"There is no doubt that religion complicates hospital mergers," said Jon O'Brien, president of Catholics for Choice, which disagrees with a variety of the religious doctrines of Catholicism.
Cardinal Edwin F. O'Brien argued in a commentary piece that ran in The Baltimore Sun in January that St. Joseph's should be bought by another Catholic institution.
"The foundation that led to St. Joseph's modest beginnings and decades of growth is the same one that must see it through this difficult time in its storied and illustrious history," O'Brien wrote. "It is a foundation rooted in the Franciscan tradition and its Catholic identity."
O'Brien, as apostolic administrator of the Arcdiocese of Baltimore, must approve any hospital merger, but a spokesman would not elaborate on whether he would shoot down a merger with a non-Catholic hospital.
Such intervention is rare but the Vatican has stepped in to stop a hospital merger, said Lois Uttley, director of the MergerWatch Project, a group that works to save reproductive health services in hospital mergers.
In some mergers, secular hospitals have agreed to ban abortions and other services to abide by Catholic doctrine. Other hospitals have used more creative means, such as segregating whole floors where these services could be allowed. In simpler examples, the Catholic and secular hospitals operate as separate entities with separate rules.
A Catholic hospital may have more say if it has the upper hand in negotiations, said those who follow religious hospital mergers. In its case, the troubled St. Joseph may be more willing to negotiate to get the best deal for the facility.
"If the non-Catholic hospital is in the better position and is committed to keeping its full menu of reproductive health services that outcome can be better for women," Uttley said.
The mergers become particularly troublesome to groups like Catholics for Choice when they would leave no other alternative for women to seek care, such as in rural areas with few hospitals.
St. Joseph began looking for a partner because of troubles it faced after complaints surfaced in 2009 that cardiologistDr. Mark Mideiperformed hundreds of unnecessary medical procedures. The hospital notified approximately 600 patients that they had stents placed in their arteries that they might not have needed. Hundreds of those former patients have since sued St. Joseph and its parent company. Midei was forced to resign from the hospital and lost his license in Maryland, a decision he is fighting.
The hospital not only has lost revenue, but patient admissions, doctors and other staff. It also has agreed to increased federal oversight after an investigation into a kickback scheme that resulted in a $22 million settlement and repayment of funds for questionable procedures.
Only one of St. Joseph's suitors, St. Agnes Hospital, is a Catholic hospital. The other two, LifeBridge Health and the University of Maryland Medical System, are non-Catholic entities. LifeBridge Health's Sinai Hospital and its geriatric facility are Jewish institutions.
All three would benefit by expanding their systems into the Towson area and gaining new patients as the health care industry becomes more competitive.
LifeBridge and University of Maryland would not comment on the negotiations because they said they had signed confidentiality agreements.
University of Maryland spokeswoman Mary Lynn Carver said that in general the 12 hospitals in its system operate independently.
"UMMS does not dictate all aspects of operation for each of our hospitals and we are sensitive to the local needs of individual communities and the history each hospital had prior to joining UMMS," Carver said. "While UMMS is not a faith-based organization, that does not preclude us from having a faith-based organization in our group of hospitals."
Bonnie Phipps, president and CEO of St. Agnes, has remained quiet on a possible acquisition but has said, "St. Agnes Hospital supports a strong, vibrant Catholic healthcare ministry."
In a recent statement, St. Joseph said that it has looked at ways other Catholic hospitals have structured agreements with non-Catholic entities. They said that in most instances the Catholic identity of a hospital was respected.
"Catholic identity continues to be foremost in our consideration," St. Joseph said in a statement released earlier this month after confirming it had identified the three finalists.
The issue of reproductive services has played a role in several recent high-profile Catholic hospital mergers.
Swedish Health Services in Seattle agreed to stop offering abortions after merging with the Catholic health system Providence Health & Services.
Sierra Vista Regional Health Center in Arizona recently ended a trial affiliation with Carondelet Health Network because the Catholic health system banned reproductive services. The ban would have left women in two counties without access to women's services, according to Merger Watch, which protested the merger.
In 1998, St. Joseph looked to merge with its neighbor GBMC but plans were scuttled after women's groups learned GBMC would ban abortions under the deal. St. Joseph eventually amended the deal to allow abortions but the damage to public opinion had been done and St. Joseph eventually stopped the talks.
This time around, women's groups, including Maryland NARAL and the Women's Law Center of Maryland, have said they have no comment on the St. Joseph merger talks because they know little about the deal.
But reproductive health conflicts don't necessarily derail such mergers. Baltimore has many examples of Catholic hospitals that have merged harmoniously with non-Catholic affiliates. Some adopted the Catholic beliefs, while others didn't.
When Liberty Medical Center in West Baltimore merged with Bon Secours Baltimore Health System in the 1990s, it adopted the Catholic beliefs.
Memorial Hospital of Cumberland joined with Sacred Heart Hospital in the 1990s but continued performing sterilizations and other reproductive services. Both hospitals were eventually torn down and replaced with one hospital: Western Maryland Regional Medical System, which does not follow Catholic doctrine.
Columbia-based MedStar Health has three Catholic institutions in its nine-hospital system. The hospitals act independently so religious-based hospitals follow Catholic doctrines and the other affiliates follow their own rules.
"Compromise is possible," said O'Brien of Catholics for Choice. "But sometimes people have to fight to get that compromise."