Memorial buying Merit Health, becoming sole owner of South MS county’s biggest hospitals
Memorial Health System is buying out Merit Health Biloxi by the first quarter of 2025, a news release Memorial issued on Friday says.
Memorial, owner of Memorial Hospital Gulfport, already acquired 50% of Merit Hospital in Biloxi and its affiliated health care businesses. Memorial has now entered an agreement with a subsidiary of Community Health Systems Inc, to buy the remaining share of Merit Biloxi’s business.
The deal merges Harrison County’s two largest hospital systems. It also includes Merit Biloxi’s medical office building, clinics, and two imaging centers. Memorial says it will not discontinue any of Merit’s services.
The two companies became partners in Merit Biloxi in 2020, when Memorial bought a 50% share of Merit, including its hospital, clinics, medical office building, imaging facilities, and Cedar Lake oncology center.
Merit, Memorial partnership formed earlier
“Our collaboration came at a pivotal time when both organizations needed to work together to ensure that health care services remained uninterrupted during an incredibly challenging period created by the global pandemic,” said Kent Nicaud, Memorial Health Systems president and CEO says in the news release.
“ . . . With our hospitals and clinics working under the same system, patients will experience smoother transitions between facilities, knowing they’re receiving the same high level of care no matter where they go.”
He said Memorial will continue to invest in it facilities and technology “to ensure that everyone in Coastal Mississippi can get the care they need, close to home.”
Memorial’s purchase will add to its properties the 153-bed Merit hospital. Memorial Gulfport has 303 beds and Memorial Hospital Stone County has 25 beds in Wiggins.
Health care consolidation’s results
Nonprofit KFF, formerly known as the Kaiser Family Foundation, provides research, polling and news in the health care arena.
“Consolidation may allow providers to operate more efficiently, and could help struggling providers keep their doors open in underserved areas, but also often reduces competition,” says an article on health-care consolidation from KFF in April. “A substantial body of evidence has found that consolidation has led to higher prices, but the evidence on quality is unclear.”
The article says provider markets have increasingly consolidated over the past 30 years, with “1,573 hospital mergers from 1998 to 2017 and another 428 hospital and health system mergers announced from 2018 to 2023.”
However, Memorial operates as a nonprofit jointly owned by the city of Gulfport and Harrison County.
In addition to the largest hospital in South Mississippi at Gulfport, Memorial Health System already operates three outpatient surgery locations, a medical office building, outpatient diagnostic centers and more than 100 physician clinics. Its services also include skilled nursing and long-term care. The health system has 5,000 employees and 400 physicians.
Memorial Hospital Gulfport has improved its financial position after “two years of sizable operating losses,” according to Fitch Ratings, a credit-rating firm that focuses on institutions and corporations.
The hospital reported $12 million in operating income for 2023, Fitch said. Contributing to improved results were $39 million in net supplemental reimbursements and $80 million in internal cost-cutting initiatives, including recommendations from a private consulting firm Memorial hired.
This story was originally published November 8, 2024 at 11:21 AM.
