Sale of Religious Hospitals to Non-Religious Buyers

When financially-stressed Catholic hospitals or health systems are put up for sale, there often is a condition that the hospital must continue to follow Catholic health restrictions after the sale.

In some cases, purchasers of these Catholic hospitals have agreed to this condition of sale without adequate input from state regulators or community members most affected by a restricted menu of services. Recent sales of Catholic hospitals in Miami and Chicago included agreements by the purchaser to allow the religious restrictions to remain in place, even though the hospital would no longer be Catholic-owned.

New proposals in Atlanta, Knoxville, TN and New Haven, CT illustrate that this trend is not slowing down any time soon. However, there are approaches available for immediately or gradually lifting religious health care restrictions at formerly Catholic hospitals, so that their patients can have access to an expanded range of services.

Sunsetting religious restrictions

Health care restrictions at religiously-affiliated hospitals can be lifted when they are acquired by secular hospitals or health systems, if the buyer  planned ahead of time. The sale of a bankrupt or otherwise fiscally-distressed religious hospital to a secular purchaser presents an opportunity to lift health care restrictions and begin to provide a complete range of health care services and options, particularly reproductive health care. This sunsetting of restrictions can be achieved in a number of ways.

• Lift the restrictions after an established transition period. This was the approach adopted by Montefiore Medical Center when it acquired Our Lady of Mercy Hospital in the Bronx section of New York City. Montefiore agreed to keep Catholic health restrictions in place at Our Lady of Mercy for three years, after which they were discontinued.
• Tie use of the religious restrictions to continuing use of the religious hospital name.  This was the approach taken by Bayonne Medical Center in its purchase of St. Vincent's Hospital in Staten Island, New York. After the transaction went through, Bayonne immediately changed the name of the hospital to Richmond University Medical Center, and thus religious restrictions were dropped.

For help in opposing such a merger in your community, contact us.