Ascension Health Alliance and Marian Health System to merge

October 1, 2012


St. Louis-based Ascension Health Alliance is in negotiations to merge with Marian Health System, a Tulsa, Okla.-based Catholic health system that owns or is affiliated with 27 hospitals and a network of other sites in four states. The systems have signed a nonbinding memorandum of understanding and hope to reach a definitive agreement for Marian to become part of Ascension Health in the first quarter of next year. Ascension Health Alliance is the parent organization of Ascension Health.

If a definitive agreement is signed, the sponsorship of Marian's three regional systems would shift from the Sisters of the Sorrowful Mother to Ascension Health Alliance's public juridic person, which is called Ascension Health Ministries; and Ascension Health and Marian would be financially consolidated.

The systems are deliberating details of the sponsorship and leadership transition now, but, initial plans call for the Sisters of the Sorrowful Mother to have representation on Ascension Health Ministries. (Currently, each of Ascension Health's six historic sponsoring congregations appoint members to the 10-member Ascension Health Ministries.) Leadership of Marian's regional systems is expected to remain largely intact, according to Anthony Tersigni, president and chief executive of Ascension Health Alliance.

The nonprofit Ascension Health operates more than 81 hospitals and a network of other facilities in 21 states and the District of Columbia and had total operating revenues of more than $15 billion and income from operations of $424 million in fiscal year 2011.

During its 2011 fiscal year, Marian had total operating revenues of more than $3 billion and operating income of nearly $121 million. Marian's Ministry Health Care operates in Wisconsin and Minnesota; Marian's St. John Health System, in Oklahoma; and Marian's Via Christi Health, in Kansas. Marian and Ascension Health have cosponsored Via Christi for five years. In Wisconsin, Ascension Health operates a four-hospital system — Milwaukee-based Columbia St. Mary's — that is not currently affiliated with the Marian system.

Tersigni noted that the acquisition is part of Ascension Health's strategy of strengthening Catholic health care providers around the U.S. to help ensure the ministry remains viable in the future. He said that while Marian is a strong system, the relationship with Ascension Health should help it to bolster its clinical and operational capabilities.

Sr. M. Therese Gottschalk, SSM, is president and chief executive of Marian. She said the provincial council of the Sisters of the Sorrowful Mother has been evaluating its sponsorship of Marian for two years and looking at options for transitioning that role, since the number of sisters is declining, and the council would like to allow for greater lay involvement in governance. Sr. Gottschalk said Marian evaluated several potential partners before deciding to move forward with Ascension Health.

Sr. Gottschalk said that through the systems' mutual sponsorship of Via Christi, Marian learned that Ascension Health has a mission and values that are very similar to those of Marian. She said the Sisters of the Sorrowful Mother have a deep concern with serving the most vulnerable, and particularly the poor and underserved. She said Ascension Health's focus on health care for all aligns with her congregation's commitment to the poor and vulnerable.

The Sisters of the Sorrowful Mother wish to retain as much governance control as possible while also transitioning to more lay involvement, according to Sr. Gottschalk, who added that Ascension Health Alliance's sponsorship model would allow for continued sponsor involvement as well as formation of potential lay sponsors. Tersigni noted that enabling this type of governance involvement is the precise reason Ascension Health moved to the public juridic person sponsor model last year.

Sr. Gottschalk said the provincial council and health system leadership also like that, as part of Ascension Health, the Marian regional systems would have a strong ongoing say in how they operate, and they would be able to retain their local identity and heritage. Tersigni said that allowing this leeway is part of Ascension Health's "distributed leadership model" of enabling local systems to largely determine the particulars of how they function on the local level.

At the same time, Tersigni and Sr. Gottschalk said, the Marian facilities will be able to learn from and implement best practices developed and shared across the Ascension Health system; and they will be able to benefit from Ascension Health's strong ability to access capital for investments.

Ascension Health Alliance is concurrently negotiating other acquisitions on the East and West Coasts, announced previously. It is aiming to acquire the Los Altos Hills, Calif.-based Daughters of Charity Health System by the end of the year. Also, Ascension Health Alliance's for-profit subsidiary, Ascension Health Care Network, is moving to acquire Saint Clare's Health System of Denville, N.J.; the timing of that deal is uncertain.

Tersigni said all of the acquisitions are aimed at bolstering the ministry so it can serve the people who rely on it. "I worry about the Catholic health ministry . . . due to threats like changes in reimbursement levels (and other changes in health care). We need the ministry to remain strong, so that the people we serve do not fall through the cracks."

Copyright © 2012 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Copyright © 2012 by the Catholic Health Association of the United States

For reprint permission, contact Betty Crosby or call (314) 253-3490.