Hugh nonprofit system feels pressure to cut costs, merge and get bigger

National Catholic Reporter, June 16, 1995 by Arthur Jones

To look at how the largest Catholic health systems are faring and how they see themselves, their work, their future and their finances, NCR contacted the headquarters of the 13 largest providers and faxed to them a four-page list of questions.

Six of the 13, including the largest, the Daughters of Charity, agreed to cooperate and provided figures and other information for this story.

The bishops

Catholic health care systems face factors other hospital systems usually do not have to deal with: relationships with local bishops; adherence to Catholic teaching (no abortions, for example); or concepts of "mission" charity care and outreach that for-profit institutions do not necessarily share or attempt to duplicate.

Some Catholic bishops are moving toward tighter local control of Catholic hospitals.

* In Salt Lake City, Bishop William Weigand, now bishop of Sacramento, Calif., rejected a Catholic hospital's plan to merge with a non-Catholic hospital.

* The New York archdiocese helped create an integrated Catholic system led by the Sisters of Charity of St. Vincent de Paul of New York, incorporating at least 13 facilities.

In the Chicago area, one hospital system anticipating Bernardin's call, was unable to find other Catholic hospitals with which to merge its Oak Park, Ill., facility. "Now there are several Catholic systems forming in the Chicago area," said Wilfred Loebig Jr., president of Franciscan Services in Wheaton, Ill. "I wish that had been the case three years ago.

"We went through the process Cardinal Bernardin outlined but had to look to non-Catholic facilities."

For that Oak Park hospital they found Westlake, a non-Catholic, nonprofit community hospital and, with Bernardin's approval, formed a holding company for both hospitals. The merger was a gain -- millions of dollars saved through combined management -- "but it still wasn't a network," said Loebig. Finally, the Oak Park system was allied with the seven-hospital Rush System for Health.

In the instance of the recent Sisters of Charity of St. Augustine-Columbia/HCA Healthcare proposed joint partnership, bishops in three dioceses have had to be consulted. Their decisions are not yet public.

Generally speaking, the Catholic bishops, as a national conference, are uninvolved in the overall Catholic health care picture beyond overseeing the moral issues such as abortion, fetal research, in vitro fertilization and sterilization.

In November 1994, for the first time in 20 years, the U.S. Catholic bishops' Committee on Doctrine approved revised Catholic health care guidelines. There were no surprises. Those moral guidelines have an effect when Catholic hospitals, to survive, seek mergers and affiliations.

Creighton University's Charles Dougherty, director of its Center for Health Policy and Ethics, sees a cause for scandal in some of the results.

"The specter we're seeing around the country of Catholic hospitals' joining competing networks and thereby working against each other in the ruthless kind of competition that now marks the health care delivery system is a potential form of scandal to well-meaning Catholics," he said.