Selling from a position of strength. A Charlotte, NC-based congregation gives up two hospitals

In 1993 the leaders of Mercy Health Services, a two-hospital system in Charlotte, NC, decided to seek a collaborative arrangement with another organization. They did this because, although Mercy was financially sound, it was generating less revenue and attracting less managed care business than its two competitors. In September 1994 Mercy's leaders signed a partnership agreement with the Charlotte-Mecklenburg Hospital Authority (CMHA), a public system that was the area's largest. Unfortunately, the agreement failed to integrate the two systems, so they continued to behave as competitors. It was also clear that CMHA, having eight board members to Mercy's four, would dominate the partnership. By early 1995 Mercy's sponsors, the Sisters of Mercy of North Carolina, had concluded that their presence was no longer needed in acute care in the Charlotte area. They and the system's lay leaders decided it would be best to end the partnership and sell their system outright to CMHA, which they did in June, for $115 million. The congregation used that money to create a foundation that will provide services for the unserved and underserved.