Otago’s largest private hospital is on the market, with “advanced” talks underway with a prospective buyer.
Mercy Hospital, founded in 1936 as a not-for-profit, employs over 280 staff across its 10 operating theatres, providing a wide range of care.
“Staying at the forefront of healthcare requires significant ongoing investment—as we have experienced here at Mercy Hospital with the extensive campus upgrades,” hospital chairwoman Lauren Semple and Whanau Mercy Ministries Trust chairman Gerald Scanlan stated in a public letter.
‘The board and its shareholder, Whānau Mercy Ministries Trust, have been working together to ensure the hospital is well positioned into the future to maintain its contribution and reputation.”
‘‘Looking forward, we believe Mercy Hospital would benefit from a new owner, and we have been working with several entities over the past few months to explore their interest.”
‘‘We can now let you know that we are in advanced discussions about a potential sale and will update you on the outcome of those discussions as soon as possible.’’
Health systems specialist and former University of Otago academic Prof Robin Gauld called the news “fascinating,” adding that without more comment from the chairs, “one could only speculate” on their reasons for pursuing this path.
‘‘It’s possible they see that there is significant scope for increasing their market share, but it’s going to require a lot of investment.”
‘‘It could be tens and tens of millions of dollars of investment in technology and equipment that they need, and they just don’t have the capital or the ability to loan.”
“They may have restrictions around loaning as well, depending upon their business model.’’
Gauld said a fascinating question is whether the hospital will go to a for-profit buyer or remain under non-profit ownership.
Meanwhile, Semple and Scanlan acknowledged the challenging and disruptive period for staff.
“We know this news may be a surprise, but we want to do what is best for Mercy Hospital Dunedin as it continues to serve the people of Otago and Southland.
‘‘We are immensely grateful for the work of the Mercy Sisters, our staff, and specialists, along with our outreach partners, all of whom make Mercy such a special place.’’