Colin G. McCulloch, Member of the Firm in the Health Care & Life Sciences practice, in the firm’s Washington, DC, office, was quoted in the Pittsburgh Post-Gazette, in “Next Up for Butler-Excela Merger: Picking a Name,” by Kris Mamula.
Following is an excerpt:
Hospital executives continue to mull a name for the Pittsburgh region’s newest health system, three months after the deal was inked, as the five-hospital merger wobbles into its first year.
But picking a name for the system created by the merger of Greensburg-based Excela Health and Butler Health System in Butler is not its biggest worry: Money woes, declining patient admissions and smothering competition from Pittsburgh’s two health care Goliaths — Allegheny Health Network and UPMC — are the more urgent issues at hand.
Whether the merger yields benefits, something Excela management says is already happening, may hinge on factors that don’t show up on a balance sheet, according to Colin G. McCulloch, partner at the Washington D.C. law firm of Epstein Becker Green, who was not involved in the transaction.
The Excela-Butler merger “looks more like a marriage of equals,” he said, “where success depends on the intangibles, the things you can’t measure with a calculator: How well do the boards get along? Does the leadership share the same culture? Do the medical staffs respect each other? You really need that chemistry.” …
Combined admissions and observation patients fell 7.2% to 6,883 at Butler and 7.6% to 12,183 at Excela for the six months ending Dec. 31. Fewer patients helped drive operating losses at Butler to $23 million on operating revenue of $226.7 million, and a $15.3 million operating loss at Excela on operating revenue of $324 million for the six months.
Butler’s losses also breached a Truist Bank loan covenant on a $20 million note that had a $15 million balance. Mr. Albanesi said negotiations with the bank were continuing, but Epstein Becker Green attorney Mr. McCulloch said the bank would have little to gain from penalizing Butler for the breach because of the system’s fragile finances.
