The University of Maryland Medical System has agreed to honor the Catholic identity and religious heritage of the St. Joseph Medical Center in Towson as the medical giant begins talks to buy the beleaguered community hospital this spring.
Cardinal Edwin O’Brien, head of the Archdiocese of Baltimore until his successor is installed May 16, said in a statement he was “disappointed” with the selection of UMMS “given the high priority we place on maintaining the Catholic identity of our many institutions in the Archdiocese of Baltimore.”
“The hospital and its staff of outstanding doctors, nurses, physicians and other healthcare workers, have a special connection to the Catholic community in the Archdiocese, as well as to countless others, and I pray these ties will not be severed by today’s decision,” Cardinal O’Brien said in a statement Friday, after the St. Joseph board’s vote.
“It is my hope and prayer that the future of the hospital will continue to reflect the values that have been the hallmark of St. Joseph’s for nearly 150 years: reverence, integrity, compassion and excellence. Deeply disappointed though we are, I am confident that this Archdiocese will do everything possible in the months and years ahead to make it so. St. Joseph’s, like all Catholic institutions that care for others, do so not because those they serve are Catholic, but because we are.”
Respecting the religious roots of the 263-bed St. Joseph was a main condition in the three-month due diligence process by its owner, Catholic Health Initiatives of Denver, hospital officials have said in statements. St. Joseph was founded in 1864 by the Sisters of St. Francis of Philadelphia and was first called St. Joseph German Hospital.
It moved to its current location at 7601 Osler Drive in 1965.
The takeover by UMMS was announced Friday after Catholic Health Initiatives officials met with the St. Joseph board.
“The decision comes after a year-long evaluation of strategic alternatives and discussions in recent months with Catholic and other not-for-profit health care organizations that expressed interest in SJMC,” a statement from St. Joseph Medical Center said. “The board recognized that as health care reform continues to evolve, it will be critical for health providers to be part of a regional network of coordinated health care organizations including hospitals, physicians, payers and other related health entities in geographically proximate areas.
St. Joseph has been under scrutiny since 2009 after hundreds of patients of its former lead cardiologist, Dr. Mark Midei, claimed they received heart stents during surgeries they did not need and filed lawsuits against St. Joseph.
Midei resigned from St. Joseph and his medical license was revoked by the Maryland Board of Physicians. He has filed a $60 million lawsuit against the hospital.
Sources close to the hospital said the institution was in financial straits because of the controversy, prompting negotiations to sell to another area medical institution despite a press release by St. Joseph that it was seeking to form a “strategic partnership” with another area medical center.
Last week’s vote ended the attempts by two other hospitals to acquire St. Joseph: LifeBridge Health, which owns Sinai and Northwest hospitals; and St. Agnes Hospital.
St. Joseph and UMMS have agreed to enter into exclusive negotiations “with the intent of signing a non-binding Letter of Intent to transfer ownership,” the statement from St. Joseph said.
“Terms of the agreement will be negotiated and followed by a definitive agreement,” it continued.
Edward Gilliss, a Towson attorney and chair of the St. Joseph board of directors, said Friday he could not comment on specific details of the vote or its implications, such as the impact to St. Joseph’s employees and why UMMS was selected.
“The board of St. Joseph is eager to continue to provide excellent health care to the Towson community and surrounding areas,” Gilliss said.
UMMS officials said in a statement Friday they were pleased to have been selected by the St. Joseph board.
“We are looking forward to working with the staff and physicians of St. Joseph and to moving forward with Catholic Health Initiatives to finalize the terms of the agreement,” Mary Lynn Carver, senior vice president of UMMS, said in a statement.
In the wake of the stent controversy, St. Joseph’s admissions and revenue fell. Recently 17 employees were laid off.
The hospital agreed to pay a $22 million settlement last November. Federal officials said that over a decade, the hospital had paid illegal kickbacks to a group co-founded by Midei, MidAtlantic Cardiovascular Associates, and separately billed federal benefit programs for the medically unnecessary stents.