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Mercy Regional to become Via Christi Hospital in sale

By Stephen Cameron

Say farewell to Mercy Regional Health Center.

No, Manhattan’s signature, 150-bed hospital isn’t going anywhere — but it officially changed ownership on Friday.

Mercy now belongs fully to Via Christi Health, a Catholic, not-for-profit organization of medical facilities that is the largest health care provider in Kansas.
Manhattan’s hospital on College Avenue will be renamed “Via Christi Hospital” later this year.

Via Christi Health is a regional giant, with more than 10,000 employees in Kansas and northeastern Oklahoma. In its 2012 fiscal year annual report, Via Christi claimed it provided $90.5 million in community benefits to those areas it serves.

Via Christi is a member of Ascension Health, the largest not-for-profit Catholic health care system in the United States.

The business portion of Friday’s transaction appears fairly straightforward, since Via Christi already owned 50 percent of Mercy. The other half was owned by the Memorial Hospital Association (MHA). Those two entities Ð which had competed with separate hospitals for decades—joined together in 1996 to create Mercy. But since then, Wichita-based Via Christi had been providing administration and other services for the hospital here.

In one sense, the transaction is merely a transfer of assets Ð beginning with Memorial receiving $7 million to create a non-profit foundation that will improve health care services in Riley County.

That money comes from the sale of Mercy’s Sunset campus to Kansas State University, a transaction that also closed on Friday. The university uses the facility as its student health center.

Some current services will remain at Sunset for two years, with Via Christi leasing the space back from K-State until everything can be housed at the main hospital: the diabetes center, sleep lab, behavioral health service and the weight loss clinic.

Meanwhile, Via Christi has agreed to provide $15.5 million in capital, along with $5.4 million in debt forgiveness involving Mercy’s operational expenses, bringing the total amount changing hands—at least on paper—to $27.9 million. That money will help improve the College Avenue facility, in particular allowing for an expansion of outpatient services in the north tower.

However, while Via Christi officials stress that the quality of care and day-to-day operations at Mercy should not be adversely affected, total control by a Catholic organization does come with some enforced changes.

For instance, religious beliefs mean that Catholic hospitals are not permitted to perform tubal ligations—tying off women’s fallopian tubes as a means of sterilization. Mercy currently provides that service to approximately 60 patients per year, officials said.

“We’ll transition to that policy over a period of time,” said Mercy senior administrator John Broberg. “Obviously, we don’t want to put patients into a difficult position with any sudden switch.”

Looking at the overall health-care picture in Manhattan, Friday’s announcement perhaps could be viewed as the next logical step in a progression.
Ever since Memorial Hospital and The Saint Mary Hospital entered into a partnership to create Mercy in 1996, and then Via Christi brought its resources into the picture as a full partner, the possibility existed that the organization with the deepest pockets eventually would take over the operation.

Via Christi already has a stand-alone presence in Manhattan. It operates Via Christi Village, an assisted-living facility on Willow Grove Rd.

Via Christi Village offers 32 assisted living apartments, and a 96-bed nursing center with primarily private rooms.

“We value our relationship with the Manhattan community,” said Via Christi CEO Jeff Korsmo. “We’re excited about continuing our strong relationship with Manhattan’s physicians, nurses and other clinicians, and with the community’s business and government leaders.”

What might the public see with the switch to Via Christi’s control of the Mercy operation?

Dr. Doug Hinkin, a family practice physician who serves on both the Memorial and Mercy boards of directors, insisted the change should be beneficial to the region.

“The best thing is having everything under one roof,” Hinkin said in reference to the sale of Mercy’s Sunset campus. “But now there are other possibilities. For instance, Mercy’s north tower possibly can be utilized after a long period where it hasn’t had any use.”

One question lingering after the Via Christi takeover concerns the future of Manhattan Surgical Hospital—the for-profit surgery clinic adjacent to Mercy that was built and remains owned by a group of local doctors.

There is clearly an odd relationship in place, since the surgical center operates in competition with the main hospital for many profitable procedures.
“Frankly, we’ve been so busy with this (transferring half-ownership to Via Christi) that we haven’t thought much about it,” said Dr. David Pauls, who is both a Memorial board member and owner-practitioner at Manhattan Surgical Center.

No one on any side of Friday’s transaction cared to comment on the future dealings between Via Christi and the surgical facility next door.
“I’m sure it will come up in discussion at some point,” Pauls said.

No future issues were going to spoil the mood surrounding Friday’s announcement, however.

Dave Gambino, Via Christi’s regional administrative officer, tied the bow on the deal: “We want to thank members of the Memorial Hospital Association board for working so closely with us since 1996, and now giving us an opportunity to begin a new era in health care for the Manhattan area.”

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