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Charleston Business

Bon Secours leader to retire, Mercy Health head to lead combined health systems

Jul 23, 2018 03:29PM ● By Chris Haire

John M. Starcher, Jr. will serve as president and CEO of Bon Secours Mercy Health

After 13 years as president and CEO of Bon Secours Health System, Rich Statuto will retire in 2019, following one year as an advisor to the newly named health system, Bon Secours Mercy Health. 

The new Catholic hospital system will combine Cincinnati, Ohio-based Mercy Health with Bon Secours Health System, a company with hospitals in Greenville and Charleston and cities in five other states. The two systems will merge this fall. 

Current Mercy Health president and CEO, John M. Starcher, Jr., will lead a combined health system of nearly 60,000 employees, 43 hospitals, and 1,000 care sites and serve an estimated 10 million patients a year.

"Our new ministry has an exciting future before it. It is positioned to be more successful than Mercy Health and Bon Secours ever could be as separate entities," Starcher says. "We will expand our services and programs, provide greater access in our markets to help and serve more people. We will be able to do even more for people who are poor, dying, or underserved, providing almost two million dollars each day in community benefit as a combined entity."

Bon Secours' Statuto is confident in Starcher and the success of the merged systems. 

"While I look forward to retirement and spending time with my family, I am fully committed to the success of our newly formed ministry. I have committed to helping over the course of the next year to ensure a robust start for Bon Secours Mercy Health as we bring together two incredibly strong organizations," Statuto says. "John and I have been working closely throughout this process and we are both fully committed to ensuring a smooth transition"

Starcher is a seasoned health care leader who was named president and CEO of Mercy Health in 2016 after 13 years with the ministry. During his time at Mercy Health, Starcher was CEO of three of four divisions within the ministry and also served as the organization’s senior vice president of human resources and assistant general counsel. He served on the Bon Secours Health System Board in 2017.

The size of Bon Secours Mercy Health is nothing compared to the giants in the industry

Presently, Nashville-based HCA Healthcare has 178 hospitals, 120 outpatient surgery centers, and 46,745 beds, and it’s looking to add six more when it buys Asheville’s Mission Health. 

Meanwhile, the next biggest system, Franklin, Tenn.-based Community Health System, has 126 hospitals in 20 states. 

The merger of of Mercy Health and Bon Secours isn't the only new partnership that will impact the Upstate.

The Greenville Health System and Palmetto Health have partnered to form the S.C. Health Company, a new health system that will be able to serve 1.2 million patients a year and will have 28,000 employees, with approximately 14,000 coming from both GHS and Palmetto Health. 

Together, the two systems will comprise 13 hospitals and scores of other practices and facilities, and according to S.C. Health, some 2.5 million South Carolinians will be within 15 minutes of a physician’s practice underneath the health system’s umbrella, making it the single largest private employer in the Palmetto State.

One unique feature of S.C. Health: the new company will be headquartered in two different cities, Greenville and Columbia, with the former head of GHS, Michael C. Riordan, and the previous leader of Palmetto Health, Charles D. Beaman Jr., taking the green-scrub reins of the combined system. 

Nationwide, hospital mergers are on the rise. According to a 2017 study conducted by Charles River Associates paid for by the American Hospital Association, mergers lowered hospital operating costs by 2.5 percent.

However, one industry watchdog remains skeptical about the claims that mergers will bring about lower costs.

“Those are promises that have been made a whole lot in the past, and very few times have they born out to be true,” says Duke University business professor Barak Richman, an expert on healthcare consolidation. He notes that hospital systems are extremely complicated operations where it’s difficult to predict costs. 

“If you don’t know what your costs and prices are, it’s very hard to say you’re going to create efficiencies,” Richman says. “Even theoretically, it’s very hard to imagine that the people who lead these kinds of mergers have a handle over them to create the kind of efficiencies they need.”

Despite this, Richman hopes that these mergers can drive down costs. “Maybe this is different, but history has provided a very consistent lesson,” he says, before adding that even new initiatives from CVS and Amazon could contribute to lower costs. “It’s possible they can provide a meaningful alternative.”