The Sale of Chelsea Hospital

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By merging, hospitals can increase their negotiating power with health insurance companies. This allows them to improve profitability, but charging insurers more for some medical procedures can trickle down to employees too, says Martin Gaynor, a professor of economics and health policy at Carnegie Mellon University. “There could be substantial harm to consumers” when a hospital buyout reduces competition in a region, says Gay¬nor. “Price increases can be substantial.” Some employers may pass along those higher costs to their staffs; others may just stop offering insurance. “Hospital mergers increase the number of uninsured,” Gaynor says, citing research from the University of Minnesota. But Chelsea CEO Griffiths says no price increases arising from the buyout are anticipated.

As for the hospital workers, “I would hope they wouldn’t do a big reduction in staff,” says Mayor Feeney. CCH employs about 1,025 people, and they will become Saint Joseph Mercy Health System employees about a year after the merger is completed. Hospital officials say the pay and benefits are comparable, but some workers are concerned.

Maggie Morehouse, Chelsea’s director of nursing, says her 230 nurses are asking about staff-patient ratios, changes in operations, and hospital culture. “They want local leadership and a visibility of leadership,” she says. “There’s always . . . fear of the unknown.” But Morehouse herself isn’t worried. She’s worked with doctors from St. Joe’s for many of her thirty-two years at Chelsea and believes it’s “community based. Their nursing care is excellent.”