THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, July 3, 1996 TAG: 9607030467
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
LENGTH: 85 lines
DePaul Medical Center, Norfolk's Catholic hospital, will be sold to the Bon Secours Health System, a company that also is affiliated with the Roman Catholic Church, officials announced Tuesday.
The sale will take place within 90 days for an undisclosed amount.
Patients walking through the door in the near future won't see different services, hospital officials said. DePaul will continue to operate as a general hospital, with all of its departments intact.
Eventually, Bon Secours officials may make changes to ``improve efficiency,'' said Christopher M. Carney, Bon Secours regional vice president. But DePaul and Bon Secours have not discussed any specific areas to target, officials said.
Bon Secours has agreed not to lay off any of the approximately 1,000 DePaul employees in the near future, hospital and Bon Secours officials said.
``One of our priorities in this is to look out for the welfare of our employees,'' said Kevin P. Conlin, DePaul chief executive officer. ``I feel the impact on our employees to be minimal.''
At this time last year, Bon Secours, based in Marriottsville, Md., owned just one local hospital, Maryview Medical Center in Portsmouth. Since then, the system has become a force to be reckoned with in Hampton Roads.
In May, it bought Portsmouth General Hospital from Tidewater Health Care and plans to close the rival facility. The company also signed an agreement this spring to jointly operate Mary Immaculate Hospital in Newport News.
The sale of DePaul will transfer all the Norfolk hospital's holdings, including doctors' practices. Eventually, the size and make-up of various departments at DePaul may be changed, and employees may be shifted to different jobs within the hospital, Carney said.
It's possible that DePaul in Norfolk and Maryview in Portsmouth will be operated by one administration, although details must be worked out, he said.
DePaul, owned by the Daughters of Charity system of St. Louis, Mo., says the move will protect the hospital's philosophical goals as well as its financial health.
The sale guarantees that DePaul will remain a Catholic hospital. It also protects the financially weak hospital from getting sold to a for-profit company. Some Catholic leaders have said the aims of a for-profit company contradict the church's mission - imitating Christ's care for the sick.
``I think it's a very smart strategic move,'' said Paul M. Boynton. He is executive director of the Eastern Virginia Health Systems Agency, which regulates hospital expansion.
All Hampton Roads hospitals are non-profit. Earlier this year, however, Riverside Health System, owners of hospitals in Newport News, Tappahannock and Gloucester, began talking about a merger with for-profit giant Columbia/HCA Healthcare Corp.
DePaul has suffered financial trouble, struggling with competition from powerhouses Sentara Norfolk General and Sentara Leigh hospitals.
DePaul ran at a loss at 1993, although it turned things around the following year, finishing with a 2.5 percent operating margin.
And, like other hospitals around the country, DePaul faces tough times. Hospital revenues are being cut by managed care, a type of insurance program that aims to reduce costs by, among other things, keeping people out of the hospital.
Many hospitals believe their futures lie in banding with larger companies, and they are picking teams.
DePaul's current owner, Daughters of Charity, has other hospitals. But DePaul wanted a local company - the closest Daughters of Charity hospitals are in Washington, D.C., and Jacksonville, Fla.
Bon Secours owns 14 hospitals nationwide - including three in Richmond - and a number of long-term care facilities.
In recent years, it looked like DePaul's local partner would be Tidewater Health Care, owner of Virginia Beach General. Tidewater also owned Portsmouth General before selling it to Bon Secours.
But Tidewater wanted to affiliate with, not buy, DePaul. Negotiations reportedly fizzled over operational matters like separate accounting procedures and supply contracts.
DePaul president Conlin, who represented Daughters of Charity in the negotiations, said the company preferred to sell the hospital rather than leave it weak enough to be taken over by a company that doesn't share its values.
In a prepared statement, Bishop Walter F. Sullivan of the diocese of Richmond said he was ``delighted'' to see Bon Secours take over. Although DePaul and Maryview are run primarily by lay people, they have members of religious orders on staff and in leadership positions.
``I have every confidence that the Bon Secours sisters will continue the wonderful tradition at DePaul of kindly care to the sick and the infirm,'' he said. MEMO: Staff writer Lon Wagner contributed to this story. by CNB