Cleveland Clinic signed an agreement with Sisters of Charity Health System to fully acquire Mercy Medical Center, a hospital based in southeastern Ohio.
The transaction, announced Tuesday (PDF), the terms of which were not disclosed, is expected to be finalized by Feb. 1. It comes as Cleveland Clinic continues to battle lower patient volumes caused by the pandemic.
“At Cleveland Clinic we are dedicated to making all of our hospitals the best place to receive care,” said Cleveland Clinic CEO and President Tom Mihaljevic, M.D., in a statement. “Together, Cleveland Clinic and Mercy Medical Center will continue to serve patients and communities with the highest quality, compassionate care.”
Mercy Medical is a 476-bed facility that serves five counties in southeastern Ohio. It will retain its Catholic identity after the deal is finalized, according to a release.
“All services at Mercy Medical Center, including COVID-19 response, will continue without interruption throughout the regulatory approval process,” the release said.
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Cleveland Clinic signed a letter of intent for the deal back in September 2019. Since then, the 11-hospital system has faced a major financial crisis caused by the COVID-19 pandemic, including low patient volumes after the system was forced to cancel or postpone elective procedures back in March.
Cleveland Clinic continues to combat a low patient volume and has had to pause elective procedures again in some facilities due to new surges of the virus.
The system reported a $49 million profit in the first nine months of the year, far below the nearly $2 billion it posted during the same period in 2019.
The system suffered a massive net patient service revenue shortfall of more than $890 million compared with the budgeted amount year-to-date.
Cleveland Clinic reported during its latest earnings report that it has enough liquidity to stay afloat. It reported $650 million in lines of credit from several banks in the second quarter and investment returns of $447 million.