UPDATE: Virtua Healthcare entered into an agreement to merge with the two Lourdes Hospitals, but not with St. Francis. Please see Virtua – Trinity Health profile.
MERGER CANCELLED: Cooper backed out of the proposed merger deal with Trinity Health on December 15, 2017, stating the deal did not pass the due diligence test. No specifics were given as to what concerns brought about the cancellation. Trinity is looking for another buyer.
This merger covers the following hospitals: Cooper University Hospital and Lourdes Medical Center Camden, Lourdes Medical Center Burlington, St. Francis Hospital Trenton.
Cooper University Hospital was started in 1887 by prominent Quaker physician Richard M. Cooper and his family. Cooper University Hospital is an academic tertiary-care hospital that is affiliated with Cooper Medical School of Rowan University. It is located in Camden and is the only Level I trauma center in southern New Jersey. Cooper also contains Children’s Regional Hospital, which is a Level II Pediatric Trauma Center. Additionally, MD Anderson Cancer Center of Houston, TX has teamed up with Cooper to provide cancer care.
Cooper has more than 6500 employees, with 1,250 nurses and 750 physicians. Cooper has 2 urgent care centers and one surgical center, with more than 100 outpatient offices across South Jersey and Pennsylvania.
Trinity Health is one of the largest Catholic health systems in the country, with 86 hospitals, 109 continuing care facilities, and 2.8 million home health and hospice care visits annually over 21 states. Maxis is a subsidiary that manages hospitals in Pennsylvania and New Jersey, including the three planning to merge with Cooper.
St. Francis is an acute care teaching hospital, noted as the first hospital in Trenton beginning in 1874, with 142 beds. Both Lourdes hospitals are also teaching hospitals, affiliated with Rowan University School of Osteopathic Medicine. The Camden campus has 350 beds and the Burlington campus has 173 beds.
The Cooper Health System (a combination of the acute-care and children’s hospitals, Cooper University physicians group [doctors employed by the hospital], and the MD Anderson Cancer Center) had total revenues in 2015 of $1.13 billion. The move by Cooper to take over the three Trinity hospitals will make the new Cooper Health Care system the 4th largest in the state. It is projected that this merger will create a $2 billion healthcare system employing 12,000 workers with 1,382 beds between the four hospitals.
The chairman of the board for Cooper is political powerhouse George Norcross, III, who has helped make Cooper a major player in New Jersey healthcare. Norcross was instrumental in bringing the MD Anderson cancer care affiliation to the hospital.
Once the merger is complete, Cooper will have control of the three Maxis/Trinity hospitals while Trinity will maintain control of the Our Lady of Lourdes Health Foundation and the St. Francis Medical Center Foundation (see organizational charts).
Since this is a merger between two non-profit hospital entities, the deal is able to avoid the Certificate of Need (CN) process with the NJ DOH. The legal counsel to Cooper and Trinity Health will likely write a letter to the Office of Certificate of Need and Healthcare Facility Licensure, confirming their understanding of the law that the Cooper and the 3 Trinity hospitals merger will not be required to undergo the CN process.
Because this is a merger between two not-for-profit entities, the merger is regulated by the CHAPA process, which requires a review by the NJ Attorney General (AG) and the Commissioner of Health. The AG must determine if the deal is “in the public interest,” and the Commissioner of Health must determine if the proposed deal “is likely to result in the deterioration of the quality, availability or accessibility of health care services in the affected communities.” As a merger between two not-for-profit systems with no purchase or sale of assets, the deal is exempt from the Certificate of Need (CN) process with the NJ Department of Health (DOH). Maxis Health, sole corporate member of both Lourdes hospitals and St. Francis sent the AG’s office a letter on September 18, 2017 as a notice of the proposed transaction including the Letter of Intent and the before-and-after organizational chart (posted on this website).
LETTER OF INTENT
On August 30,2017 Cooper University Health Care sent a Letter of Intent (LOI) to Maxis Health System (Trinity Health is the parent company) outlining the basic structure of the merger agreement with fifteen steps including: Confidentiality agreement; Non-Binding Nature of LOI; Term of agreement; Due Diligence Issues; among others. Both parties will undertake negotiations with the intent to merge based on the parameters included in the letter of intent.
Once the AGs office has been notified, Maxis will be obligated to answer questions to the satisfaction of the AG addressing all aspects of the merger including access to services, improvements to infrastructure, board members, and maintaining all current hospital services. The process for answering the initial questions and further completeness questions before reaching final approval may take a year or longer.