St. Joseph Medical Center to Buy Holy Cross

In yet another sign of the financial crunch faced by hospitals in the managed-care era, the order of Catholic nuns that owns St. Joseph Medical Center is acquiring Holy Cross Medical Center, another Catholic hospital in Mission Hills.

Hospital executives said Tuesday that both institutions and their emergency rooms will remain open, and they pledged to keep providing millions of dollars in free care to the poor--a major mission of both nonprofit facilities.

Administrators of both hospitals declined to disclose the terms, which are still being negotiated. Holy Cross, owned by the Holy Cross nuns of Notre Dame, Ind., is being acquired by the Seattle-based Sisters of Providence Health System, which owns St. Joseph in Burbank and 13 other hospitals in Washington, Oregon and Alaska.

The deal was announced at a time when hospitals across the nation are merging to gain more negotiating clout against health maintenance organizations and other managed care groups, which insure millions of people and have used that leverage to sharply drive down hospital and doctors’ fees in recent years.

From 1989 to 1993, there has been a wave of 87 mergers and consolidations involving 178 hospitals across the United States, according to the American Hospital Assn., an industry trade group. The association does not keep figures on how many hospitals have closed or declared bankruptcy as managed care has revolutionized the health care business.

Deep price cutting has affected even the most prestigious hospitals.