Mercy Health System announced March 2 it has entered into an agreement in which Prime Healthcare Services, a health system based in Ontario, Calif., would acquire Mercy Suburban Hospital in East Norriton, Pa.
“We are excited for the opportunity to acquire Mercy Suburban Hospital and look forward to enhancing its services to the Montgomery County community,” Prem Reddy, MD, FACC, FCCP, chairman, president and CEO of Prime Healthcare, said in a news release. “We are committed to making hospitals successful by strengthening, building, investing and improving their programs and facilities. Prime Healthcare’s mission is to turn hospitals into thriving community assets which provide access to quality healthcare for the benefit of the community they serve.”
Mercy Health System concluded the sale of the hospital and its assets to Prime Healthcare was in the best interest of Mercy’s non-profit mission, its patients, employees and the community Mercy Suburban Hospital has served over the years, according to the release.
Under the agreement, Prime Healthcare has agreed to acquire Mercy Suburban Hospital as well as the related physician practices and ambulatory sites including Mercy Health Center at Plymouth Meeting Mall. Upon the completion of the sale, Mercy Suburban will no longer be a Catholic hospital, nor will it have a Catholic affiliation, and it will not use the Mercy name, according to the release.
Prime Healthcare has committed to invest at least $30 million in capital improvements in the hospital over a five-year period following the close of the sale, according to the release. Prime Healthcare also has agreed to adopt a charity care policy comparable with the hospital’s current charity care policy.
“We engaged in a process to thoroughly evaluate possible options for Mercy Suburban Hospital and ultimately determined that both Mercy and Prime Healthcare shared a common vision for the future of the hospital that was in the best interest of its patients, colleagues and community,” Susan Croushore, interim president and CEO, MHS, said in the release. “Prime Healthcare has a successful track record of sustaining and advancing access to quality healthcare services through its acquired hospitals, which importantly includes the provision of charity care and other community benefits.”
The transaction is expected to take approximately four to six months to close, upon receipt of necessary regulatory approvals.