Ascension takeover bid for St. Joseph’s falls apart

NJBIZ STAFF//August 3, 2012//

Ascension takeover bid for St. Joseph’s falls apart

NJBIZ STAFF//August 3, 2012//

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The breakup means Ascension also loses out on St. Mary’s Hospital, the acquisition of which was contingent upon a deal with St. Joseph’s.

St. Joseph’s Healthcare System announced today it has ended discussions with Ascension Health Care Network, of St. Louis, for a possible takeover.

According to spokeswoman Nancy Collins, the hospitals’ board of trustees decided after months of due diligence and discussions with community leaders that the merger was not best for the hospital.

“St. Joseph’s Healthcare System will continue to consider and investigate options for health care collaborations and alliances as they arise,” Collins said in an e-mail, adding that details of the board’s decision are confidential and would not be released.

St. Joseph’s declined to provide any additional comment.

Mark Manigan, a member of the health law team at Brach Eichler LLC, said St. Joseph’s seemed to be on stronger financial footing than the other Catholic hospitals involved with Ascension.

“St. Joe’s has come a long way over the last couple years. … They’ve got strong leadership in place, and good docs,” Manigan said. “Word on the street is not that that place folds absent a transaction.”

Manigan said recent developments, including a bill awaiting the governor’s signature that would force for-profit hospitals to disclose finances like nonprofits, has made New Jersey’s struggling hospitals “not terribly appetizing” to for-profit operators as they were a few months ago.

Assemblywoman Shavonda Sumter (D-Paterson) was surprised by the end of the negotiations, although she said there was concern in the community whether the mission of the hospital would remain the same under the for-profit ownership. She said St. Joseph’s is critical to Paterson, as it is the only hospital in the state’s third-largest city, and the Ascension deal was a good opportunity for all of the involved hospitals to receive funding for needed infrastructure upgrades that the state can’t afford.

Sumter is the director of behavioral health services at Mountainside Hospital, which is now owned by a for-profit venture between Hackensack University Medical Center and LHP Hospital Group, an ownership model similar to Ascension’s. She also sits on the Health and Senior Services committee in the Assembly.

St. Mary’s bid ends, too

The end of the talks spelled the end for Ascension’s takeover of St. Mary’s, in Passaic; that acquisition was contingent upon a deal with St. Joseph’s getting done, according to Joe Orlando, a spokesman for Ascension.

St. Joseph’s was one of three health care systems in the state that announced earlier this year they were interested in working with the for-profit Catholic Ascension Health Care Network. St. Clare’s, based in Denville, and St. Mary’s, in Passaic, also have been in discussion with the system, totaling seven hospitals in all that were in the mix. In a statement, St. Clare’s spokeswoman Stephanie Galloway said the system’s “discussions with Ascension Health Care Network are ongoing.”

Ascension said it was “disappointed by the decision of the St. Joseph’s board of trustees,” in a statement. ” Our ultimate goal was to ensure St. Mary’s and St. Joseph’s would have sufficient resources to continue providing quality patient care while maintaining their Catholic identity.”

St. Mary’s “will be in discussions with the state to determine what role (it) will play in continuing to deliver health care services to the city of Passaic and the surrounding communities,” a statement from the hospital read.