Trinity Health’s St. Francis Medical Center is exploring a possible sale to its neighbor, Capital Health.
The Trenton, N.J. teaching hospital announced Monday it has signed a letter of intent to join two-hospital Capital, whose Trenton hospital is just two miles away. The systems declined to share more detail on their plans, but said the non-binding agreement is the first step in evaluating a framework for the transaction, which would need state and federal approval.
Founded by nuns, St. Francis was Mercer County’s first hospital in 1874 and remains its only comprehensive cardiac surgery provider.
St. Francis CEO Daniel Moen said in a statement that both his hospital and Capital are deeply committed to caring for the community.
“The rapidly changing healthcare landscape presents challenges, but it is through a shared mission that both organizations look to expand services and positively impact the health and well-being of local and regional residents,” he said.
St. Francis is on shaky financial footing, having lost money in at least each of the past four years. The hospital posted a $15.8 million loss on $126.8 million in operating revenue in 2019, according to a Modern Healthcare analysis of the most recent CMS cost reports, which are self-reported by the hospitals or systems. However, it’s owned by one of the country’s largest not-for-profit health systems. Livonia, Mich.-based Trinity has more than 80 hospitals and almost $19 billion in annual revenue.
Trinity also tried to sell St. Francis to Cooper University Health Care along with two other hospitals, but Cooper backed out in late 2017.
Capital’s Trenton hospital also operated in the red in 2019, the latest year for which financial data are available, having lost $3.7 million on $307.9 million in operating revenue, Modern Healthcare’s data show. The system’s larger hospital in Hopewell, N.J. fared better, posting $12.8 million in operating profit on $482.8 million in revenue.
“This approach aligns very well with Capital Health’s mission, and we are committed to our shared vision of providing the highest level of care for the community,” Capital CEO Al Maghazehe said in a statement.
