Kansas City Business Journal by David Twiddy, Reporter
Date: Friday, June 1, 2012
Carondelet Health has confirmed that it is investigating a potential merger, joint venture or other partnership to continue operating its two Kansas City-area hospitals.
In a released statement, Carondelet CEO Fleury Yelvington said the health care provider “like most health systems in Kansas City and across the country” was being pressured by expected changes in how hospitals are paid for medical care and needed to consider its options.
“The goal of any transaction would be to strengthen our position in this market to better serve our patients,” Yelvington said. “While Carondelet Health has had similar conversations with other health systems over a number of years, these discussions have intensified recently due to coming health care reform measures and the myriad of other reimbursement and care delivery issues that will markedly change the way hospitals operate.”
Carondelet operates 310-bed St. Joseph Medical Center in Kansas City and 146-bed St. Mary’s Medical Center in Blue Springs.
Yelvington didn’t disclose who her company was speaking with. But Kansas City already features a few health care groups operating multiple hospitals, including HCA Midwest Health System and the Saint Luke’s Health System. Spokespeople with both companies declined to comment about whether they were speaking with Carondelet.
Hospitals are under increasing financial stress because they have to care for more patients who either have no way of paying their medical bills or have insurance unwilling to pay higher levels of reimbursement.
The Missouri Hospital Association said Kansas City-area hospitals saw uncompensated care increase 15 percent between 2008 and 2010, when they provided almost $185 million in charity care and wrote off an additional $104.5 million in bad debt.
In addition, the federal government, as part of its health care reform law, is expected to begin compensating health care providers not for the number of procedures they perform but for the overall quality of patient outcomes. That will require significant expenditures for computerized patient record systems and community-wide partnerships for coordinating patient care.
Carondelet’s hospitals reported profits in the fiscal year ending June 30, 2010, the most recent for which figures are available. But in fiscal 2009, St. Joseph reported a $3.1 million loss while St. Mary’s lost $1.1 million.
The last big shift in hospital ownership in Kansas City came in 2003 with HCA Inc.’s $1.13 billion purchase of Health Midwest.
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