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The Sisters of Charity of St. Augustine Health System and University Hospitals Health System Form New Cleveland Healthcare Entity.

CLEVELAND--(BW HealthWire)--March 2, 1999--The Sisters of Charity of St. Augustine Health System (CSA Health System) and University Hospitals Health System (UHHS) today announced the signing of a Memorandum of Intent to form two new, not-for-profit, joint venture corporations, one in Cleveland and one in Canton, Ohio.

The new partnership in Cleveland will include the assets of the existing Caritas Healthcare Partnership including: St. John West Shore Hospital; St. Vincent Charity Hospital; Saint Luke's Medical Center; Ohio Health Choice, one of Ohio's oldest and largest PPOs; and Professional Medical Equipment Services, a durable medical equipment company. In Canton, the new partnership will include Mercy Medical Center and its facilities and services in Stark and Carroll Counties. All facilities in the new partnerships will continue to operate as Catholic healthcare entities. The 50-50 joint venture corporations will replace the existing Partnerships between the CSA Health System and Columbia/HCA Healthcare Corp. (Columbia/HCA).

University Hospitals Health System and CSA Health System will form a new, separate, not-for-profit corporation to acquire substantially all of the assets of the current Caritas Healthcare Partnership. University Hospitals Health System will acquire a 50 percent interest in the assets of this new not-for-profit corporation. The Sisters of Charity of St. Augustine Health System will have a 50 percent interest. To enter into the 50/50 relationship in the two new not-for-profit corporations with CSA Health System in Canton and Cleveland, University Hospitals Health System, in effect, will pay a total of $65 million to Columbia/HCA to acquire Columbia/HCA's interests in the assets.

The announcement was made jointly by: Sister Judith Ann Karam, CSA, president and CEO of the CSA Health System; Farah M. Walters, president and CEO of University Hospitals Health System; and Charles R. Evans, president of Columbia/HCA's Mid America Division.

"We look forward to establishing this new joint venture with University Hospitals Health System and continuing the Catholic mission of our hospitals," said Sister Judith Ann. "UHHS clearly demonstrates that its employees and physicians are committed to quality healthcare with excellence and compassion. The commitment of UHHS organization to meet the needs of the community is well known. In recent years, they were honored by the Urban League, YWCA, NAACP and Better Business Bureau for their exceptional contributions to the community and their service to patients."

"We are extremely pleased to be forming this partnership with the CSA Health System, with whom we have many common values and philosophies," said Farah M. Walters. "Our founding hospitals are two of the oldest in northeast Ohio. And for more than 130 years, each of us has been deeply committed to clinical excellence and community service. By working collaboratively, we will carry on that tradition, while enhancing the delivery of healthcare services to the Greater Cleveland community."

"We also wish to recognize with respect and appreciation our partnership with Columbia/HCA," said Sister Judith Ann. "We will long remember that our partnership with Columbia strengthened our facilities in many ways and enabled the Congregation to establish a sizable foundation in Cleveland."

Founded in 1996, the Sisters of Charity Foundation of Cleveland has current assets of $48 million and awarded more than $5.7 million in much needed funds within Cuyahoga and Lorain Counties during the past two years. The Foundation concentrates its grantmaking priorities on the broader causes of poverty, including substance abuse, homelessness, the lack of early childhood education, employment and healthcare for the working poor and frail elderly.

"The leadership of Caritas Healthcare Partnership looks forward to working with our counterparts within the University Hospitals Health System to enhance the geographic presence of our hospitals and outpatient centers with improved accessibility for our patients and physicians in both suburban and urban locations," said Stephen L. Royal, president and CEO of the Caritas Healthcare Partnership.

Under the pending agreement, currently employed staff of the Caritas Healthcare Partnership will become employees of this new, not-for-profit, joint venture.

"The new partnership will give us access to the research and resources of UHHS which will ultimately enhance our centers of excellence while enabling us to continue our support of the private practice model," said John Marshall, M.D., president, Caritas Physician Network. "UHHS brings nationally recognized expertise in cancer care, pediatrics, women's health and many other specialty areas that are vital to our future growth."

"As with the current partnership with Columbia/HCA, the new, not-for-profit, joint venture will be a Catholic healthcare provider by adhering to the Ethical and Religious Directives for Catholic Health Care Service and other faith obligations," said Sister Mary Patricia Barrett, CSA, chairperson of the board of trustees of the CSA Health System. "We are pleased that through this new partnership, our Congregation will continue our mission and ministry and meet the needs of the underserved."

"This is an important alliance for healthcare in the northeast Ohio region," said Richard W. Pogue, chairman of the board of trustees of University Hospitals Health System. "We have great respect for our new partners, and this alliance will give the hundreds of thousands of families we serve even greater access to high-quality health care."

"The goal of Columbia/HCA has always been to work collaboratively with the CSA Health System in order to strengthen its ministry within the community," said Charles R. Evans, president of Columbia/HCA's MidAmerica Division. "It is our belief that our support of the coming together of the CSA Health System and UHHS will lead to the formation of a strong, locally and strategically designed integrated delivery network across northern Ohio. As a result of this change, Columbia/HCA will no longer have a hospital presence in northeast Ohio."

The CSA Health System and University Hospitals Health System are long standing healthcare organizations with deep roots in the community. Their founding hospitals are two of the oldest hospitals in Cleveland; St. Vincent Charity Hospital was founded in 1865, and University Hospitals of Cleveland in 1866.

The CSA Health System was established in 1982 as the parent corporation for the institutional health and human services ministries of the Sisters of Charity of St. Augustine. In November 1995, the CSA Health System established three partnerships with Columbia/HCA in Canton and Cleveland, Ohio and Columbia, South Carolina, that would preserve and strengthen their Catholic health care ministries.

University Hospitals Health System includes a network of physicians, outpatient centers and hospitals; wellness, occupational health, skilled nursing, elder health, rehabilitation and home care services. More than 15,000 physicians and employees constitute UHHS, ranking it among northeast Ohio's largest employers. University Hospitals of Cleveland, the System's tertiary medical center, is the primary affiliate of Case Western Reserve University. Together, they form the largest center for biomedical research in the state. The System also includes Rainbow Babies and Children's Hospital, Ireland Cancer Center (northeast Ohio's only National Cancer Institute designated Comprehensive Cancer Center); and MacDonald Women's Hospital, UHHS Bedford Medical Center, UHHS Brown Memorial Hospital, UHHS Geauga Regional Hospital, UHHS Laurelwood Hospital and Counseling Center, UHHS Memorial Hospital of Geneva, and Southwest General Health Center (under a partnering agreement).

In addition to its partnership hospitals, the Sisters of Charity of St. Augustine Health System operates foundations and other ministries to meet health and human service needs in Canton and Cleveland, Ohio and South Carolina.

In 1997, UHHS was a founding member of University Hospitals Regional Network, a network of health systems in northern Ohio. The Network also includes Akron General Health System (Akron General Medical Center); Forum Health (Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren, Tod Children's Hospital in Youngstown and Hillside Rehabilitation Hospital in Warren); and Providence Health System (Providence Hospital in Sandusky).

National City Investments is serving as financial advisor to the CSA Health System.
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Publication:Business Wire
Geographic Code:1U3OH
Date:Mar 2, 1999
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