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St. Luke's and Sacred Heart Hospital to merge; struggling hospital had nine suitors

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Richard Anderson, CEO and president of St. Luke's University Health Network, addresses the media this morning at a news conference at Sacred Heart Hospital in downtown Allentown. Sitting is John Nespoli, president and CEO of Sacred Heart HealthCare System.
Richard Anderson, CEO and president of St. Luke's University Health Network, addresses the media this morning at a news conference at Sacred Heart Hospital in downtown Allentown. Sitting is John Nespoli, president and CEO of Sacred Heart HealthCare System. - (Photo / )

Less than a week after announcing it will acquire Blue Mountain Health System, St. Luke's University Health Network will merge with Sacred Heart HealthCare System in Allentown.

The struggling Sacred Heart, which had a $2.5 million operating loss for the fiscal year that ended June 30, had been in talks with other health care organizations and chose SLUHN after several months of study, officials said.

“This is a great day for Allentown and the citizens,” Richard Anderson, CEO and president of St. Luke’s University Health Network, said at a news conference this morning at Sacred Heart Hospital in downtown Allentown.

The focus is going to be on the downtown Allentown neighborhood, the Lehigh Valley’s poorest area, officials said.

In the spring, Sacred Heart approached St. Luke’s, officials said. Nine health systems – profit and nonprofit – expressed interest in a merger with Sacred Heart, said John Nespoli, president and CEO of Sacred Heart HealthCare System.

“It’s a great fit for Sacred Heart,” Nespoli said, adding that there is “a natural synergy between the two health systems.”

One of Sacred Heart’s suitors was Lehigh Valley Health Network, according to Anderson.

The agreement was unanimously approved by the boards of both nonprofit organizations and signed Friday. The merger is expected to be completed by early next year, pending regulatory approval.

“From day one, they understood what we saw was the future of this hospital,” Paul Huck, chairman of Sacred Heart HealthCare System’s board of directors, said about St. Luke’s.

Founded as a Catholic medical center in 1912 during a diphtheria epidemic, Sacred Heart Hospital will retain its Catholic identity, officials said, which means its services are based on the religion’s ethical and religious directives.

Sacred Heart’s name will likely be incorporated in the new name, SLUHN said. Buildings named after donors to the hospital also will be honored, it said.

Sacred Heart HealthCare System employs more than 1,070 people in its network, which includes Sacred Heart Hospital, primary care centers at 10 sites throughout the Lehigh Valley and senior housing services.

Like the merger with Blue Mountain, St. Luke’s said Sacred Heart employees’ compensation and opportunities will be enhanced from merger.

SLUHN said the agreement includes a commitment to retain the members of the medical staff at Sacred Heart and assume physician employment agreements, and maintain charity care policies similar to other St. Luke’s hospitals.

SLUHN is one of the two largest health systems – LVHN is the other – in the Lehigh Valley, with seven hospitals and more than 270 outpatient sites serving 10 counties in Pennsylvania and New Jersey.

“St. Luke’s has an incredible track record of working successfully with community hospitals,” Nespoli said in a statement. “With the partnership of St. Luke’s, Sacred Heart will offer our physicians and employees growth opportunities and, most importantly, continue with our charitable mission in the heart of the city.”

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