Civista Health System to Affiliate with UMMS

John Commins, for HealthLeaders Media , May 26, 2011

Mark Reiboldt, a mergers and acquisitions analyst with Coker Group, told HealthLeaders Media that the deal "is another example of the healthcare delivery system moving towards consolidation at faster rates than ever before."

"Civista reported just under $119 million in gross patient revenue in 2010, up from nearly $113 million the previous year. They are running at 73% occupancy, which was also up from 2009, and an average daily census of 87.5. And almost 40% of their revenue is derived from commercial and HMO managed care with another 40% being Medicare," Reiboldt says.

"This is a health system located in a decent market; they have had very decent historical volume and revenue growth; and, they are generally known as a quality-oriented system. However, even the decent and high performers are struggling from the same challenges that every other healthcare facility throughout the country is facing: rising costs, declining reimbursement, increasing regulatory pressure and general economic uncertainty.  And as clinical integration and physician alignment become more critical to the hospital business model, Civista, like many other health systems that we are seeing go through consolidation, appears to be pursuing a partner that will attract the physicians, market demographics and operational efficiencies needed to facilitate growth for hospitals in the future," he says.

Civista Health CEO Noel Cervino, CFO Erik Boas, and CMO Mark Dumais, MD, were employees of UMMS under the management agreement and will continue in their current jobs. Employees of the hospital will remain locally directed and employed by Civista Health, and the existing Civista pension and benefit plans will not be affected by the affiliation.

UMMS is a private, not-for-profit network of 12 academic, community and specialty hospitals throughout Maryland. The system has $2.5 billion of annual operating revenues, employs 15,000 people, has more than 2,300 licensed beds, and has more than 115,000 annual patient admissions, which is more admissions in Maryland than any other healthcare provider.

UMMS also has a strategic affiliation with Upper Chesapeake Health System which is expected to lead to a full merger by 2013. Upper Chesapeake Health includes Upper Chesapeake Medical Center in Bel Air and Harford Memorial Hospital in Havre de Grace.

John Commins is a senior editor with HealthLeaders Media.

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