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Civista Health System to Affiliate with UMMS

 |  By John Commins  
   May 26, 2011

Civista Health System of Charles County, Maryland said Wednesday that it has signed an agreement to become a member of the University of Maryland Medical System, effective July 1.

Civista Health, with its flagship 130-bed Civista Medical Center in La Plata, MD, has been operated by UMMS under a management agreement that began in 2009. The renewal terms of the 2009 agreement included a provision for UMMS and Civista Health to affiliate, subject to the approval of both the UMMS and Civista Health Boards.

"The past two years have given us an opportunity to experience what a full partnership with the University of Maryland Medical System could mean for Civista Health and the communities we serve," Sara Middleton, chair of Civista Health's Board, said in a media release. "UMMS possesses the resources and scale to help us fulfill our mission to provide the finest in health care services to Charles County and all the citizens of Southern Maryland."

Civista Health and Civista Medical Center will continue to be governed by their own boards and will retain their own foundation. The Civista Health Board will nominate a member to the UMMS Board. 

"Healthcare is very local, and to realize our goals of providing effective healthcare in the communities in which we own hospitals, we must have vibrant, local boards as partners," Robert Chrencik, president/CEO of UMMS, said in a media release.

Working with the UMMS over the past two years, Civista Medical Center implemented clinical quality best practices and is now among the leaders throughout the UMMS in core measures of clinical quality. UMMS and the University Of Maryland School Of Medicine also helped Civista recruit new physicians to the underserved area. The hospital has also seen patient volume increases in the emergency department, inpatient, and surgical services.

Civista has increased the size of its campus through several land and building acquisitions, growing by 40% over the past two years. Financially, following five years of losses, Civista Medical Center experienced three consecutive years of operating gains, assuring that it will meet its financial commitments and reserve funds for needed capital upgrades in the future.

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 content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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