The dissolution of a letter of intent between Mercy Health System of Maine in Portland and Boston-based Steward Health Care System was announced Dec. 10, and Steward Health claims it "unilaterally withdrew" from the deal despite coverage hinting otherwise, according to a Boston Globe report.
The Boston Globe obtained a confidential memo from Steward Health's director of media relations Chris Murphy, which pointed to a misrepresentation of finances by Mercy Health as the reason the deal fell through. This is different than the jointly released statement, which said the parties could not reach a definitive agreement.
According to the memo, Mercy Health's data on patient volume and trends as well as reported construction costs for a new campus in Maine were higher than Steward Health had been led to believe. In addition, Mercy Health's parent company, Catholic Health East, withdrew $9 million in cash from the hospital after Steward signed a letter of intent, according to the report.
According to the report, the following was written in the memo by Mr. Murphy: "With each day that passed during the due diligence process, our confidence in the numbers presented by Mercy eroded to the point that we were unable to responsibly submit a bid. We came to the conclusion that, even if Mercy were to give us their hospital for free, we couldn't make the numbers work."
A representative from Mercy Health only commented to say that Mercy has never represented its finances or volume numbers. According to the report, in the memo Mr. Murphy expressed his belief that Maine press coverage had given the impression that Steward had lost a competitive bid for the hospital.
Mercy Health announced a new potential deal with Eastern Main Healthcare System Dec. 10, shortly after announcing the end of the potential deal with Steward.
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The Boston Globe obtained a confidential memo from Steward Health's director of media relations Chris Murphy, which pointed to a misrepresentation of finances by Mercy Health as the reason the deal fell through. This is different than the jointly released statement, which said the parties could not reach a definitive agreement.
According to the memo, Mercy Health's data on patient volume and trends as well as reported construction costs for a new campus in Maine were higher than Steward Health had been led to believe. In addition, Mercy Health's parent company, Catholic Health East, withdrew $9 million in cash from the hospital after Steward signed a letter of intent, according to the report.
According to the report, the following was written in the memo by Mr. Murphy: "With each day that passed during the due diligence process, our confidence in the numbers presented by Mercy eroded to the point that we were unable to responsibly submit a bid. We came to the conclusion that, even if Mercy were to give us their hospital for free, we couldn't make the numbers work."
A representative from Mercy Health only commented to say that Mercy has never represented its finances or volume numbers. According to the report, in the memo Mr. Murphy expressed his belief that Maine press coverage had given the impression that Steward had lost a competitive bid for the hospital.
Mercy Health announced a new potential deal with Eastern Main Healthcare System Dec. 10, shortly after announcing the end of the potential deal with Steward.
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