Mercy Health Partners to Purchase Jewish Hospital

Selection by The Jewish Foundation of Cincinnati ensures long-term vitality of Jewish Hospital; Will create Cincinnati’s premier faith-based regional healthcare system

CINCINNATI, OH – The Board of Trustees of the Jewish Foundation of Cincinnati has selected Mercy Health Partners to purchase The Jewish Hospital of Cincinnati, officials announced Tuesday, July 7, 2009.

The decision initiates exclusive negotiations with Mercy Health Partners for the purchase of the hospital. The transaction is expected to take four to six months to complete, pending due diligence, regulatory and governance approvals.

This agreement follows a thorough and deliberate 18-month search by the Foundation Trustees and nationally recognized healthcare experts for a partner that will secure the long-term vitality of Jewish Hospital, further strengthen its quality of care and ensure that Cincinnati’s Jewish community and that of Greater Cincinnati continues to benefit from the historic, 160-year investment and support of Jewish Hospital.

“We are delighted to have selected Mercy Health Partners to purchase Jewish Hospital,” said Gary Heiman, president of the Jewish Foundation.

“Jewish Hospital must be aligned with a clinically sound and financially strong healthcare system to ensure its long-term vitality in an increasingly complex healthcare environment. In joining Mercy Health Partners, Jewish Hospital will have a powerful partner who appreciates our hospital’s value and unique heritage.  At the same time, the Trustees recognize that, since the founding of the hospital in 1850, other social service, healthcare and educational needs have also become important priorities for the sustainability of Cincinnati’s Jewish community. A sale of Jewish Hospital will support the Foundation and its work to address those needs.”

With this transaction, Jewish Hospital also joins Catholic Healthcare Partners, the largest health system in Ohio and one of the largest nonprofit healthcare systems in the United States. Mercy Health Partners, its Cincinnati-based health system, is a growing $750 million, five-hospital system that serves the entire region.

“Mercy Health Partners recognizes the strength of Jewish Hospital, the extraordinary quality of clinical care delivered by its staff and physicians, and its bright future within a system of hospitals that serve a growing region,” said James May, President and CEO of Mercy Health Partners and Divisional CEO of Catholic Healthcare Partners.  “Mercy Health Partners will honor the hospital’s unique Jewish heritage and we pledge to protect it as we move forward with Jewish Hospital into the future.”

"At Mercy Health Partners, we are always working to provide high-quality healthcare where people live.  Our five hospitals and dozens of support facilities are in locations throughout Greater Cincinnati that are convenient for our patients.  Adding the exceptional care and rich tradition of The Jewish Hospital to our organization builds on this commitment and expands our primary service areas to include Kenwood and the surrounding communities,” said May. “In addition, with Jewish Hospital, MHP will serve nearly 300,000 emergency room visits each year -- three times as many as any other health system in the region.”

Michael D. Connelly, President and CEO of Catholic Healthcare Partners said, “Catholic Healthcare Partners, Mercy Health Partners and Jewish Hospital share a rich tradition of healing and providing quality healthcare to people of all faiths. Together, we will improve the delivery of healthcare in Cincinnati by unifying two very strong organizations with a long tradition of excellent quality care and clinical outcomes, with the goal of creating Cincinnati’s premier faith-based healthcare system.  Mercy Health Partners will have the full support of Catholic Healthcare Partners to help ensure success.”

Key Commitments

As part of the proposed agreement approved yesterday, Mercy Health Partners will, among other commitments:

• Continue to employ all current Jewish Hospital employees upon completion of the sale;
  
• Continue to use the Jewish Hospital name, maintain Jewish symbols and indicia and respect Jewish holidays and traditions;
  
• Invest significant capital in Jewish Hospital’s facility, its medical technology and to otherwise improve the hospital over the coming years. The actual level of that commitment will be determined as Mercy Health Partners completes its due diligence and consults with Jewish Hospital physicians and staff;
  
• Have a representative of the Jewish Foundation Board of Trustees join the Mercy Health Partners Board of Trustees to provide insight into Jewish Hospital’s history, maintain and grow Jewish Hospital’s operations, provide advice and consultation with respect to maintaining the facility’s Jewish identity, and provide expertise for the region as a whole.

In the approved agreement, Mercy Health Partners has proposed to purchase Jewish Hospital for approximately $180 million. The final purchase price will be determined after on-going due diligence and other negotiations are completed.
From the final purchase price the Foundation will fund certain obligations related to its participation in the Health Alliance of Greater Cincinnati, including appropriately funding the hospital’s portion of the Alliance’s employee pension program, and addressing other matters.

After those obligations are satisfied, the remaining net proceeds of the sale will benefit the Jewish community through the on-going work of the Jewish Foundation of Cincinnati. Given the complexities of these obligations, it is inappropriate to estimate today what amount the net proceeds may total.

Importantly, these dollars are in addition to the significant capital Mercy Health Partners has committed to reinvest in Jewish Hospital for facility improvements and other purposes over the coming years.

Next Steps

Tuesday’s board decision begins a due diligence process during which both parties will work exclusively together on various aspects of the transaction and develop a definitive agreement. This process is expected to take the next four to six months. The formal transition of ownership will follow all of this work, as well as the review of appropriate government agencies.

Jewish Hospital will continue delivering high quality healthcare to its patients and today remains a valued member and contributor of the Health Alliance of Greater Cincinnati.

Reflections on the Mercy Health Partners-Jewish Hospital Merger

“In  joining  Mercy Health Partners, Jewish Hospital will have a powerful partner who appreciates the hospital’s value and unique heritage.”     -Gary Heiman, President of the Jewish Foundation of Cincinnati

“The addition would give Mercy access to patients along the Interstate 71 corridor it doesn’t curretly reach with its hospitals in Batavia, Anderson Township, Fairfield, Mount Airy and Westwood. The fit betweeen the two is just terrific.”     - Jim May, President of Mercy Hospitals.

The Partners

Jewish Hospital

Founded in 1850, The Jewish Hospital of Cincinnati is the oldest Jewish hospital in the United States. Funded by philanthropic members of the Jewish community of Cincinnati, the hospital was created to provide much needed healthcare services for the Jewish community at a time when those services were not available elsewhere and to provide a place for Jewish doctors to practice at time when they were not welcome on the medical staffs at other hospitals.

Over time, Jewish Hospital has grown into a nationally recognized hospital that provides quality healthcare throughout the Cincinnati region. In an effort to remain competitive and reduce costs and over capacity, Jewish Hospital joined the Health Alliance of Greater Cincinnati in 1995.

The Jewish Foundation

Deeply rooted in the Jewish community, the Foundation is a private philanthropy whose mission is to support, promote, advance and strengthen the Jewish community and Jewish causes in Greater Cincinnati. Currently, the Foundation has more than $61 million in assets and focuses its resources in long-term investments and strategic and transformational grants that add to the vitality of the Jewish community now and for years to come.

Founded in 1995 from the transition of Jewish Hospital into the Health Alliance of Greater Cincinnati, the Foundation has a 14-year history of supporting Jewish heritage. Over the years, it has remained dedicated to ensuring the Jewish community thrives and that it contributes to the prosperity of the region.
 
Mercy Health Partners

Mercy Health Partners is a faith-based healthcare system with care-delivery sites throughout Greater Cincinnati.  Mercy encompasses five award-winning acute care hospitals, senior living communities, primary care practices, imaging/diagnostic centers, social service agencies, urgent care centers, health and wellness centers, a weight loss management program and a variety of outreach and ambulatory centers.  For more information visit: www.e-mercy.com.

Catholic Healthcare Partners

Catholic Healthcare Partners is the largest health system in Ohio and one of the largest nonprofit health systems in the U.S.  With $4.76 billion in assets, CHP employs 36,500 associates in more than 100 organizations, including 32 hospitals that serve the healthcare needs of people in Ohio, Tennessee, Kentucky, Pennsylvania and contiguous states.  True to its mission, in 2008 CHP provided more than $335 million, or 8.2 percent of total expenses, in targeted community benefit.  CHP actively lives its values by committing to comprehensive benefits, including health care coverage for all regular associates, and by paying competitive wages, including a just wage that exceeds state and federal minimums.  CHP is proud that its associates provide high quality care to all who walk through its doors: in fact, CHP was ranked 5th in a recent study that compared quality of care among 73 of the nation's largest healthcare systems.