Expansion for Bon Secours

System completes acquisition of Franciscan Health

Revenue about to surge

N.Y. company has eight hospitals in four states

Health care

January 05, 2000|By Kristine Henry | Kristine Henry,SUN STAFF

Bon Secours Health System Inc. said yesterday that it has completed an acquisition that increases its revenue by more than half.

The Marriottsville-based system, which has revenue of $1.1 billion a year, purchased Franciscan Health Partnership Inc. of Albany, N.Y. Its annual revenue is about $700 million.

Franciscan's eight hospitals, located in Kentucky, South Carolina, New York and New Jersey, brings to 24 the number run by Bon Secours.

The combined system also has 10 long-term nursing care facilities, seven assisted- and independent-living facilities, 11 home-care and hospice services and a variety of primary care and outpatient facilities.

"We have the foundation of a truly unique organization," said Sister Patricia Eck, chair of Bon Secours' board of directors. "A new [Bon Secours] which will weave the historic traditions and cultures of three congregations and their facilities into a single system that will underpin a thriving Catholic health ministry."

The Bon Secours (French for "good help") sisters traveled from France in 1881 to Baltimore to nurse the sick in their own homes.

They opened the Bon Secours Hospital in 1919 on West Baltimore Street, and the nonprofit health system was started in 1983.

Even before the Franciscan deal, the system had experienced rapid expansion. It more than doubled in size in only four years, going from six hospitals with 1,167 beds in 1993 to 15 hospitals with 2,728 beds in 1997.

The Franciscan purchase is in line with Bon Secours' strategic plan to expand its system, said Peggy Moseley, vice president of planning, marketing and communications. Bon Secours would not divulge the price it paid for Franciscan.

Moseley said the purchase is not expected to cause any layoffs and that patients should not notice any changes.

The combined entity puts Bon Secours among the 10 largest Roman Catholic health systems in the country, Moseley said.

Hospitals in general have been consolidating at a rapid clip, although their reasons have evolved, said Gerard Anderson, director of Johns Hopkins' Center for Hospital Finance and Management.

Originally, hospitals thought they could save on overhead costs by merging, he said, but they found that not to be as true as they had hoped.

"The reason why [hospitals in general] are merging now is that they want more power to negotiate with managed care companies," he said.

"They can say, `We won't accept a rate below X.' "

He said in states with a small number of managed care companies and few health systems, that approach can be successful, but it's not always as successful in areas such as New York and Maryland -- with so many providers and managers.

"Would I do it if I were Bon Secours? Yes, it doesn't cost a lot," he said. "There's no downside."

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