February 2000

St. Joseph Regional Health Network Working Toward Sale of St. Joseph Hospital in Lancaster

St. Joseph Regional Health Network has signed a letter of intent to pursue a formal relationship between St. Joseph Hospital, Lancaster, Pa., and Health Management Associates (HMA), Naples, Fla. The Board of St. Joseph Regional Health Network is now working toward a final agreement for the sale of St. Joseph Hospital to HMA.

After months of review and consideration of options, the St. Joseph Regional Health Network Board made the recommendation to Catholic Health Initiatives to pursue an agreement with HMA. "In reaching this difficult decision, St. Joseph Hospital put the needs of the Lancaster community first," said John Tolmie, chief executive officer of St. Joseph Regional Health Network. "We are committed to assuring that quality, compassionate health care is available to the people of Lancaster. In a difficult health care environment marked by intense competition and declining reimbursement for services, our goals would be better met by combining resources with Community Hospital of Lancaster (which is also owned by HMA) and HMA."

"Catholic Health Initiatives and the St. Joseph Regional Health Network Board are committed to continuing a Catholic health ministry in the Lancaster market," said Patricia A. Cahill, president and chief executive officer of Catholic Health Initiatives.

Although details are presently being developed, plans include the Catholic health care ministry being continued through community-based models of health programs and services supported by the St. Joseph Hospital Foundation. "Today, there are many providers of acute hospital services," said Tolmie. "However, there continues to be a pressing need for community-based outreach and health programs and services, such as the Children’s Health Achievement and Motivational Program and the Parish Nurse Ministry Program. These contemporary community-based health initiatives resonate with the original reason why the Sisters of St. Francis of Philadelphia began their hospital ministry in Lancaster in 1883 – to provide needed health care services to the community."

If St. Joseph Hospital is sold to HMA, the St. Joseph Hospital Foundation would retain its tax-exempt status, and function as a non-profit entity that funds and manages numerous community health initiatives that have been developed by St. Joseph Hospital to serve the Lancaster area. The St. Joseph Hospital Foundation would be independent of HMA and will remain part of the St. Joseph Regional Health Network.

Any agreement to sell St. Joseph Hospital is subject to final approval by the Commonwealth of Pennsylvania, Catholic Health Initiatives and the Catholic Church. Upon approval of the sale, thehospital would become a subsidiary of HMA, a publicly traded company listed on the New York Stock Exchange, which currently owns 36 hospitals in 12 states.

"This has been and continues to be a very difficult decision for the St. Joseph Regional Health Network Board, the Board of Stewardship Trustees and the Catholic Health Initiatives leadership team," said Cahill. "We offer our continued prayers and support for the patients, physicians and staff of St. Joseph Hospital."