Hospital Mergers: Creative Solutions 

Sometimes, secular hospitals are able to largely maintain their historic missions and services when partnering with Catholic hospitals, by adopting a firm stance in negotiations prior to the partnership. 

But often, the CEOs and boards of secular hospitals are pressured by their prospective Catholic hospital partners to agree to adopt all or some of the Ethical and Religious Directives for Catholic Healthcare Service(ERDs), which are issued by the U.S. Conference of Catholic Bishops.

In such a circumstance -- when secular hospitals agree to adopt Catholic health restrictions in order to partner with a Catholic institution – officials of a secular hospital should be asked to consider creating a separately-incorporated space to protect patients’ access to comprehensive reproductive health services. This approach, referred to in the hospital industry as a “carve-out,” has been successfully employed in several recent secular/Catholic hospital partnerships.

Frances Kissling talks about how MergerWatch balances right for religious freedom and public need for health care.

The creative solutions presented below have been used to protect patients’ rights and access to comprehensive services when religious and secular hospitals are merging as equals, or when a secular hospital is being acquired by a conservative religious health system. The third model reflects emerging practices for lifting religious health restrictions and enhancing patients’ access to care when a conservative religious hospital is acquired by a secular hospital or health system.

Hospital-within-a-Hospital

In this model, the merged entity typically adopts the religiously-based service restrictions of the more conservative religious partner hospital. But, a separately-incorporated entity (sometimes referred to as either a “hospital within a hospital” or a “condominium hospital”) is created to provide reproductive health services in a suite or floor within the formerly secular hospital building. Sometimes, this entity is operated by a foundation or other corporate entity established by the formerly secular hospital prior to the merger. In other cases, the “hospital within a hospital” is run by a separate group, such as an association of doctors who use the facility. Two examples of this model are illustrated below.

• Since 2004, the Austin Women’s Hospital in Texas has provided maternity services, sterilizations, emergency contraception for women who had been raped and family planning services on the fifth floor of Brackenridge Hospital, a city-owned facility managed by Seton Healthcare Family, a member of the Catholic Ascension Health system. The space was carved out from Brackenridge and is managed by the University of Texas Medical Branch;
• In New York State, the Burdett Care Center is on the second floor of secular Samaritan Hospital in Troy, which affiliated with a Catholic health system. The separately-incorporated and licensed birthing center includes family planning services and maternity care and allows women delivering babies to have post-partum tubal ligations. But no abortions are allowed within the facility. Read more about this case here.

This arrangement keeps the provision of reproductive health services within the hospital, instead of fragmenting women’s health care by isolating these services at another location. It does not, however, address the issue of religious restrictions on end-of-life choices in the rest of the hospital.

Read more about this workable compromise in our Hospital-within-a-Hospital briefing paper.

Hospital-beside-a-hospital  

The “hospital beside a hospital” model is a separately-incorporated ambulatory surgery center on or near the hospital campus to provide those services that are no longer allowed within the hospital. This model is less desirable than keeping the services within the hospital, and so should be considered as a second-tier option. The most recent example of this approach has been developed by secular Kingston Hospital in Kingston, NY, in order to complete a state-mandated merger with nearby Benedictine Hospital, which is Catholic. With financial assistance from the state, a new separately-incorporated ambulatory surgery center was constructed in the parking lot of Kingston Hospital. The center was designed to provide a mixed menu of day surgeries including reproductive health care such as elective tubal ligations, vasectomies and abortion services.

Read more about this solution and the community efforts necessary to achieve it in the Spring 2012 issue of the New York State Bar Association's Health Law Journal and the Spring 2009 issue of On The Issues.