SYRACUSE, N.Y. — The pandemic-related financial difficulties that St. Joseph’s Health has faced in 2020 “did not directly” play a role in its decision to sell Franciscan Companies to a Pennsylvania firm.
St. Joseph’s Health on Sept. 28 announced it had signed an agreement to sell Franciscan Companies, its durable medical equipment (DME) company, to AdaptHealth, described as a “national network of medical-equipment companies.”
St. Joseph’s had been considering selling the DME company before the onset of the COVID-19 impact in Central New York, Janet Ready, COO of St. Joseph’s Health, tells CNYBJ in an email interview.
“However, COVID did accelerate our decision as we recognized a need to focus more closely on our core service offerings, such as inpatient, ambulatory, and primary care. AdaptHealth’s primary business is in the DME space and its mission most closely aligned with Franciscan’s,” Ready says.
She declined to disclose the sale price for this transaction, which will close Oct. 31.
Franciscan Companies is an affiliate of St. Joseph’s Health. AdaptHealth (NASDAQ: AHCO) is headquartered in Plymouth Meeting, Pennsylvania, near Philadelphia.
AdaptHealth is a medical-equipment company with operations in 39 states.
In addition to 36 employees at the North Syracuse–based Franciscan Health Support offices, this sale will also impact 10 employees who are based in Binghamton at the Lourdes Health Support location, St. Joseph’s Health said.
The Franciscan Companies offices and warehouses will remain in their current locations in Onondaga and Broome Counties and be operated by AdaptHealth beginning Nov. 1. The “vast majority” of Franciscan employees have been offered positions with AdaptHealth, per a St. Joseph’s Health news release.
Starting Nov. 1, Franciscan Health Support and Lourdes Health Support will become AdaptHealth New York. Moving forward, St. Joseph’s Health will utilize AdaptHealth’s services as a preferred provider for all DME.
AdaptHealth is “well-positioned” to provide Franciscan and Lourdes Health Support customers with services and “access to innovative technology,” St. Joseph’s Health contends.
“The decision to sell Franciscan wasn’t made lightly, as it has been an important part of the St. Joseph’s Health family since 1983,” Ready said in the release. “This move will allow St. Joseph’s Health to focus on our core business of acute, ambulatory/outpatient, and primary care.”
In her email, Ready says St. Joseph’s Health used a request-for-proposal process to vet interest, and the organization selected the “most appropriate” buyer based upon the criteria that was set and the offer price.
In announcing the sale, St. Joseph’s Health noted that the health-care environment has had “significant changes” in recent years. Debate over the type and structure of health services in the country, continual decreases in reimbursement, rising costs, and demand for greater efficiency are just a few of the challenges that health-care organizations face.
“These changes are impacting everyone,” St. Joseph’s Health added.