Sisters of Charity Health System and University Hospitals Finalize Restructuring of Joint Venture

1/4/2010

CLEVELAND — January 4, 2010 — The Sisters of Charity Health System (SCHS) and University Hospitals (UH) announced the finalization of an agreement signed on December 31, 2009, to restructure the two joint ventures that originated in 1999.  In March 2009, both health systems acknowledged the need to change the joint ventures to better serve the needs of the community and that greater effectiveness in operations would be critical to the success of the Catholic hospitals’ ministries in today’s economic environment.  
“At the forefront of this restructuring was how we could best serve the health care needs of these three communities – Canton, Cleveland and Westlake,” said Sister Judith Ann Karam, CSA, president and CEO of the SCHS. “We have a long history of providing quality health care in Northeast Ohio and have developed strong areas of specialized care at St. Vincent Charity Hospital, St. John West Shore Hospital and Mercy Medical Center.”
Completion of the restructuring returns Mercy Medical Center in Canton and St. Vincent Charity Hospital in Cleveland to sole ownership by SCHS.  SCHS solely owns four hospitals – St. Vincent Charity Hospital, Mercy Medical Center and two hospitals in South Carolina – all united in one mission to continue the healing ministry of the Sisters of Charity of St. Augustine.   In addition, the 50-50 joint venture by both systems will continue at St. John West Shore Hospital in Westlake with both health systems equally represented at the governance level. UH will become the manager and will more closely align the hospital with UH’s centers of excellence and institutes including its nationally ranked UH Case Medical Center; UH Rainbow Babies & Children’s Hospital; UH Ireland Cancer Center and other UH medical centers and physician practices throughout Cleveland’s West Side suburbs. Both SCHS and UH will make equal investments in the strategic expansion and growth of St. John West Shore Hospital totaling up to $100 million over five years. UH, as the manager, will be responsible for the strategic planning and investment as approved by the Board to ensure that these initiatives enhance the quality of services provided to the West Side community.  Both members support the vision to further strengthen the position of SJWS as the premier health care provider in the West Side community.   
To support the mission and vision for St. Vincent Charity Hospital, both health systems will also jointly invest $30 million over three years through a newly established foundation to promote long-term philanthropic support for St. Vincent Charity Hospital’s mission of providing high-quality patient care to Cleveland and beyond.   
“We value our long-standing relationship with the Sisters of Charity Health System and believe that this new structure will provide extraordinary opportunities for growth and expansion as well as greater access to the highest quality of care provided anywhere in the country,” said Thomas F. Zenty III, CEO of University Hospitals. “The $100 million in new strategic investments is a clear commitment by both owners to making St. John West Shore Hospital a destination hospital on the West Side.  We strongly believe that by working closely with the excellent clinical staff and employees at St. John West Shore Hospital as well as through the support of our community leaders and our volunteers we will succeed in making this vision a reality.”
All three hospitals will have separate Federal 501 C3 nonprofit status and retain their Catholic mission, identity and faith obligations as they serve the ongoing health care needs of their communities.  In addition, hospital leadership will remain under current hospital presidents:  Cliff Coker at St. John West Shore Hospital; Thomas Cecconi at Mercy Medical Center; and Sister Judith Ann Karam, CSA at St. Vincent Charity Hospital.              
SCHS also has plans for capital projects in excess of $80 million to continue its clinical excellence in medical services at Mercy Medical Center (Mercy).  Mercy has long been a leader combining compassionate care with high-tech innovation and will continue its focus on emergency services, cardiovascular care, cancer care, stroke care, orthopedics and rehabilitation.  Most recently the hospital added innovative robotic surgical equipment to its full complement of modern heath care services.
“Not only does this restructuring reflect what’s best for each community, but it also demonstrates the vitality of Catholic health care and provides significant dollars for reinvestment in each of these hospitals,” said Karam.  “We are pleased to continue providing Catholic health care to the Greater Cleveland and Canton communities, continuing our 158-year legacy of healing individuals, families and communities.”

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