The Sisters of Charity Health System and University Hospitals plan to modify the existing 50/50 not-for-profit ownership structures of St. Vincent Charity Hospital in Cleveland and Mercy Medical Center in Canton, Ohio.
According to a non-binding letter of intent, the Sisters of Charity Health System will obtain complete ownership and governance of St. Vincent Charity Hospital and Mercy Medical Center. An equal 50/50 joint venture between SCHS and UH will remain at St. John West Shore Hospital, with UH assuming operations through a new management agreement.
The letter also notes that SCHS and University Hospitals will make equal investments totaling $100 million for St. John West Shore Hospital. The systems will jointly invest $30 million combined in St. Vincent Charity Hospital to create a fundraising foundation to support the hospital.
"This agreement will enable University Hospitals to better serve the entire St. John West Shore community," said Thomas F. Zenty, CEO of University Hospitals. "The $100 million in new strategic investments is a clear commitment by both members to making St. John West Shore a destination hospital on the West Side.”
Sister Judith Ann Karam, president and CEO of the Sisters of Charity Health System, said the decision focused first on how to best serve the healthcare needs of three communities – Canton, Cleveland and Westlake, Ohio.
"We have a long history of providing quality healthcare in greater Cleveland and have developed strong areas of specialized care at St. Vincent Charity and St. John West Shore," she said. "In Canton we’ve built an outstanding hospital with exceptional services and medical expertise. Our decisions on this new agreement were based on community needs and recognition that greater effectiveness in operations will be needed in today's environment."
The Sisters of Charity Health System will return to sole stewardship of Canton's Mercy Medical Center. Karam said the hospital has plans for capital projects in excess of $100 million and has recently added innovative robotic laparoscopic surgical equipment to its complement of healthcare services.
"Given the economic and market realities of today and evolving technology, the decision to implement this new agreement reflects how healthcare and the delivery system is changing," Karam said. "This agreement will enable the Sisters of Charity Health System to more fully integrate our four wholly owned hospitals.”
While the boards of both health systems have approved the non-binding letter of intent, approval of the transaction is subject to the preparation of final legal documents, which will occur over the next several months.