LifeBridge Health, which operates Sinai Hospital in North Baltimore, announced Tuesday that it will acquire Bon Secours Hospital, a primary provider of medical and behavioral health services to underserved residents of West Baltimore.
The move, less than six months after Bon Secours merged with the Catholic health provider Mercy Health of Ohio, continues the consolidation of hospital ownership within Maryland. The larger health systems say aligning their facilities puts them on more solid financial footing by cutting operating costs while widening access to medical specialties, but the moves also stoke fears in local communities about changes to long-provided services.
Financial details of the deal were not disclosed, but officials said funds would be paid over six years to the Bon Secours Baltimore Foundation, which operates the social services side of the hospital’s current work.
Executives from both sides say the split will mean continuation of medical services at the hospital, including emergency, primary, specialty and behavioral health care, plus the possibility of new services identified as lacking during a review by LifeBridge officials in coming months.
Other services that affect health but aren’t medical in nature such as affordable housing and job training will remain under Bon Secours Mercy Health leadership.
Eventually the Bon Secours Hospital, which has 69 beds and just over 700 employees, will get a new name, provided state regulators approve of the deal, which officials say they expect.
“Our intent is to work with the existing facility to expand health care services to the community and add resources,” said Neil Meltzer, president and CEO of Baltimore-based LifeBridge Health, though he wouldn’t rule out certain job cuts.
“We’re building on a strong foundation,” he said. “Bon Secours and LifeBridge Health have a similar set of values. This is a natural fit for the two of us. We had been working together long before we discussed this.”
The Sisters of Bon Secours have long provided care in West Baltimore, building the first Baltimore hospital in 1919 after three decades of offering social services. They support the acquisition, said Sister Anne Lutz, chief sponsorship and mission officer for Bon Secours Mercy Health, who will remain with that system.
The officials say other Maryland leaders support the move, including Gov. Larry Hogan, Baltimore Archbishop William E. Lori, Baltimore Mayor Catherine E. Pugh, Maryland Health Secretary Robert R. Neall and Nelson Sabatini, chairman of the Maryland Health Services Cost Review Commission, a state regulatory agency.
The officials said they believe the move will help Bon Secours continue to provide a spectrum of care needed in West Baltimore where health disparities in chronic diseases and other conditions are stark.
Pugh said in a statement that the acquisition “ensures that the health care and support services so vital to the residents of west Baltimore will continue uninterrupted.”
Those who follow hospital mergers agree the move could be a good thing.
Tinglong Dai, associate professor of operations management and business analytics in the Johns Hopkins University Carey Business School, said the argument against consolidation is often decreased competition and quality of care. But maybe not for Bon Secours, which serves a poor, mostly minority population in West Baltimore.
Such patient populations bring complex health needs and sometimes an inability to pay, and that can put a hospital in a “non-ideal” financial position. Dai said if this is the case with Bon Secours, LifeBridge could supply much needed resources. He noted Bon Secours scored poorly on the latest report from Leapfrog, a nonprofit group that produces an annual assessment of patient safety, scoring a “D,” up from a previous “F.”
“It seems fair to say this hospital is in a situation with significant upside potential,” he said. “One would hope the acquisition helps deliver just that.”
The hospital reported $114 million in revenue in its 2017 fiscal year. It admitted 3,673 people that year, performed 1,661 inpatient and outpatient surgeries, and saw 24,538 emergency room visits. It reported charity care of $675,000.
Others agreed that challenging finances could be behind the sale and that West Baltimore stands to gain from a LifeBridge takeover. That includes Joshua Nemzoff, president of Nemzoff & Co, a New Hope, Pa.-based hospital acquisitions consulting firm, who said hospitals rarely sell themselves unless they are in financial distress or fear they will be.
“It’s why everybody sells, especially Catholic hospitals that have a very clear mission,” he said. “The questions is, can LifeBridge do any better? I don’t know. But they are in a much better position to run the hospital because they have other hospitals in Baltimore and they have synergies and can consolidate some services… And when a well capitalized system takes over a distressed hospital, it does nothing but improve quality.”
To address any concerns in the community, Bon Secours and LifeBridge plan to hold a series of community meetings to provide details and answer questions. They also plan to set up a website, westbaltimorehealth.org, to provide ongoing information.
During the transition, hospital leadership will be taken over by LifeBridge, which, in addition to Sinai, also operates Northwest Hospital, Carroll Hospital and Levindale Hebrew Geriatric Center and Hospital. Sinai is a large regional facility that serves as one of the region’s four trauma centers, as well as offers well-regarded specialties in orthopedics and other areas.
Discussions about the acquisition began about three years ago, said Dr. Samuel L. Ross, currently chief community health officer for Bon Secours Mercy Health and CEO of Bon Secours Baltimore Hospital. Ross plans to stay with the social services side of the split, which was set up as it’s own entity called Bon Secours Community Works several years ago in the event the hospital was sold. It’s supported by the Bon Secours foundation.
Officials there, for example, have developed more than 800 units of affordable housing in Baltimore and recently announced an effort to create more.
Ross said he believes residents will be better served by having separate entities focusing on medical care and social services, though he said officials will continue to work closely together to improve the health of the community.
“Bon Secours has determined that partnership and a renewed focus on our innovative model of health care delivery is necessary to accelerate and improve health outcomes for the West Baltimore community,” he said. “Bon Secours and LifeBridge Health are committed to focusing on better access to quality health care services, wellness and prevention, addressing the root causes of health disparities and transformational work to improve the health and wholeness of West Baltimore.”