NH Union Leader – January 7, 2025
By MICHAEL COUSINEAU, Union Leader Staff
HCA Healthcare can buy financially strapped Catholic Medical Center after agreeing to strengthen requirements regarding maternity services and behavioral health, regulators announced Monday.
A financial review of the state’s second-largest hospital shows it’s on “the brink of bankruptcy” and doesn’t have enough money to replace a crumbling power plant that “would render the hospital wholly inoperable” if it failed, according to a 29-page report from the state Charitable Trusts Unit.
“This settlement represents a thoughtful approach that both addresses the insurmountable financial challenges CMC is facing and ensures that the health care needs of New Hampshire residents continue to be met,” Attorney General John Formella said in a statement.
The Charitable Trusts Unit as well as the Consumer Protection and Antitrust Bureau under the Attorney General’s Office reviewed the proposed deal for more than six months. During the state’s review, “CMC’s competitors took advantage of CMC’s instability by hiring away practitioners and staff,” the report said. CMC also laid off 142 employees last April to reduce its losses. The state and HCA agreed to more than a dozen conditions for the deal to proceed. They include protecting critical health care services, including pregnancy care and emergency behavioral health services for at least 10 years, subject to certain contingencies.
The charitable trust unit’s “concerns about labor and delivery were particularly heightened because of HCA’s prior decision to terminate labor and delivery at Frisbie Memorial Hospital shortly after taking ownership,” the report said. As part of its 2020 acquisition, HCA promised to keep the labor and delivery services at the Rochester hospital open for at least five years, but it did not. HCA also committed to contributing $2 million over the next three years to local community health initiatives, including yearly payments of at least $300,000 to Healthcare for the Homeless and the Poisson Dental Clinic.
Payments totaling $7.5 million over 10 years will be made to the Healthcare Consumer Protection Trust Fund. That money will support community health programs in the Manchester community and other initiatives to benefit health care consumers in the state. HCA will add 10 designated beds to provide psychiatric treatment to involuntary patients at its New Hampshire hospitals within two years. The beds will be part of HCA’s $200 million capital investment commitment to strengthen health care infrastructure in the state. Under the deal, HCA Healthcare would pay an estimated $110 million to acquire the 330-bed hospital on Manchester’s West Side. An undisclosed amount of the sale proceeds would go toward funding a new charitable foundation dedicated to supporting health care in the area and the state “in the Catholic tradition,” CMC previously said. The deal is scheduled to close by Jan. 31.
CMC handles more than 1,000 births and 31,000 emergency department patients per year. As a for-profit company, HCA’s acquisition of CMC “will result in the creation of a significant new tax revenue source for the City of Manchester and increase HCA’s already substantial state and local tax payments,” the report said. In 2023, HCA paid $259.3 million in salaries and benefits operating its New Hampshire locations — including three other hospitals — and paid state and local taxes totaling $67.9 million. Manchester Mayor Jay Ruais called the announcement a “pivotal moment” for Manchester. “CMC’s partnership with HCA Healthcare ensures immediate access to the financial and operational resources necessary to sustain its more than 130-year legacy of providing high-quality Catholic healthcare to our region,” the mayor said. The sale “ensures access to high-quality care close to home, preserves our Catholic mission and positions CMC to grow and adapt to the evolving needs of our patients,” Tim Riley, chair of CMC’s board of trustees, said in a statement. “We are confident this decision will strengthen health care throughout the region for years to come.”
CMC has projected losses of $41.5 million for its 2024 fiscal year and its debt totals around $160 million, according to the report. The three New Hampshire hospitals already owned by HCA — Frisbie, Portsmouth Regional and Parkland Medical Center in Derry — have reaped industry-leading profits while receiving the lowest ratings from their patients, according to a Union Leader review of state and federal records last summer. HCA Healthcare reported the second-highest financial operating margin among 43 health systems nationwide ranked by Becker’s Hospital CEO Report.
HCA recorded an 11.8% margin for calendar year 2023.