MAUMEE, Ohio — McLaren plans to close Maumee's St. Luke's Hospital in the next two months, citing declining revenues and an unstable reimbursement environment.
The Grand Blanc, Michigan-based company made the announcement Friday morning in a news release. McLaren said the process to notify employees, patients, regulators and community partners has begun.
The release states operations will be discontinued by mid-May.
“Despite the tireless dedication of everyone associated with McLaren St. Luke’s, we have not been able to overcome the historic financial losses experienced by this hospital – losses that began long before COVID-19 that now run into the millions each month,” McLaren St. Luke's President and CEO Jennifer Montgomery said in the release. “Our passion for patient care and commitment to clinical excellence have never wavered. But sadly, we are not on a financially sustainable path.”
McLaren and Mercy Health are in the process of completing a purchase agreement and Mercy will acquire the hospital's facilities and physical assets. McLaren said on its website that Mercy plans to restore some outpatient services later this year.
Mercy will work with WellCare Physicians Group practices through the transition with the goal of maintaining patient care. Current patients at St. Luke's will complete their care.
The hospital "will begin to reduce admissions and wind down other clinical operations" in the coming weeks.
Mercy expects to offer jobs to a "significant percentage" of the St. Luke's staff. A Mercy spokesperson told WTOL 11 that Mercy "intends to extend career opportunities" to St. Luke's associates and providers, and the recruiting team is meeting with each employee to identify job opportunities across the Toledo market.
"Mercy Health is committed to increasing access to high-quality, compassionate care throughout the Toledo region,” said Mercy Health – Toledo President Bob Baxter. “We are honored to work with McLaren St. Luke’s to offer a seamless transition of care for patients, community members and associates in Maumee and the surrounding areas.”
Maumee Mayor Rich Carr said the city is still determining the potential impacts of Friday's news.
"I spoke with the president of St. Luke’s and she assured me that the asset purchase agreement will provide for St Luke’s current employees to become part of the Mercy system, maintaining their full seniority, which was an immediate concern," Carr said. "The most significant potential impact for not only the residents of Maumee, but also residents in Monclova, Waterville, Waterville Township , Whitehouse and other townships in that area would be the longer transport time to get to a hospital for emergencies. It is our hope that Mercy will address that concern as a first priority."
St. Luke's has faced financial difficulty for the last several years. McLaren purchased the hospital in December 2019 and St. Luke's became the healthcare system's first hospital outside Michigan.
McLaren announced in June 2021 it was investing $100 million over five years into the facility. St. Luke's was on track to lose $37 million this year.
“Though this is not the future any of us envisioned for McLaren St. Luke’s, the reality is that times have changed," St. Luke's Board Chair Tim Goligoski said. "With so many hospitals in the area and more and more procedures being done in an outpatient setting, a facility like ours just cannot compete. It’s a tough pill to swallow for those of us who have been part of St. Luke’s for years or even generations, but we take pride in the impact we’ve had and the countless lives we’ve touched along the way.”
In 2010, St. Luke's attempted to merge with ProMedica to curb financial problems. The Federal Trade Commission denied the move in 2011, saying it would have violated anti-monopoly laws and driven up costs.
WTOL 11 Reporter Michael Sandlin contributed to this report.
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