Twenty-five years after the Sisters of Providence founded a Catholic hospital in Holyoke in 1873, the hospital, which would become Mercy Medical Center, moved to a building on Carew Street in Springfield. Since then, the hospital has become an integral part of the Springfield community.

While Baystate Medical Center is Springfield’s teaching hospital that offers high-level trauma and specialty care, the 182-bed Mercy Medical Center is its community hospital. Generations of babies have been born there, Latino residents from around the region often favor Mercy, and poor and uninsured residents rely on it. Mercy and Baystate are the only adult-serving hospitals in Massachusetts’ third-largest city.

For years, however, Mercy Medical Center has struggled financially and teetered on the brink of closure. The announcement Tuesday that Baystate had signed a deal to acquire Mercy Medical Center is likely the best outcome to save the community hospital. Healey administration officials told the editorial board that state officials have been working with leaders of both institutions and the city of Springfield for around 15 months as part of an effort to keep Mercy open and maintain access to care. Baystate Health, a locally owned nonprofit that owns Baystate Medical Center, is already the largest provider of medical services in Western Massachusetts, serving more than 800,000 people through four hospitals, four community health centers, and doctors’ offices.

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Yet at a time when all hospital systems — and Baystate Heath is no exception — are struggling, the question will be how to maintain the qualities and services that have made Mercy Medical Center a vital institution while turning it around financially. Given the geographic closeness of Mercy Medical Center and Baystate Medical Center — they’re less than a mile apart — a key part of the discussion will likely involve determining which services should be offered at Mercy Medical Center and which could move to Baystate. As state regulators consider whether to approve the acquisition, they should delve into data and listen to community voices to determine which of Mercy’s services are most important to maintain at that location.

In a joint press release, Mercy Medical Center and Baystate Health said financial pressures at Mercy threatened its viability. The organizations blamed inadequate reimbursements for care, industry-wide shifts like declining payment rates, changing consumer preferences toward outpatient services, and persistent staffing shortages.

Rob Simpson, a health care consultant who previously worked as an executive at both Baystate Health and Mercy’s parent company, told the editorial board that the One Big Beautiful Bill Act passed by Congress is also likely to harm community hospitals like Mercy because cuts to Medicaid and health insurance subsidies will result in more patients losing insurance. Additionally, Mercy was acquired by Trinity Health of New England, part of Michigan-based Trinity Health, in 2015. The system owns four hospitals in Connecticut, but only one in Massachusetts, which may have made it harder to sustain economies of scale here or refer patients between facilities.

According to data from the Center for Health Information and Analysis, Mercy Medical Center posted a nearly $40 million loss in fiscal 2025, making it one of the least profitable hospitals in the state. More than two-thirds of its patients have public insurance, according to fiscal 2024 data. (A high public payer rate hurts a hospital’s bottom line, since Medicaid pays providers less than commercial insurance.)

One of the most frequent reasons for inpatient stays at Mercy in 2024 was childbirth, according to CHIA, yet hospitals often lose money on maternity care. In December 2025, Mercy closed its birthing unit, sending patients to Baystate Medical Center to deliver.

Before the acquisition can go through, the Department of Public Health will conduct a Determination of Need review, and the Health Policy Commission will review the impacts on cost and market functioning. If the commission believes there is a need for further action — such as the imposition of conditions on a transaction — the commission can refer its report to the attorney general or DPH. The attorney general could, for example, require a hospital to maintain certain services or set limits on its future price increases.

Presumably, Baystate Health officials believe they can improve Mercy’s financial situation. One way to do this would be to consolidate back office functions, thereby cutting administrative overhead. It’s also possible the health system will shift some medical services from one location to the other, although health system officials are not yet publicly talking about what that could look like.

Jaime Hyatt, cochair of the Massachusetts Nurses Association at Mercy Medical Center, told the editorial board that staff are already worried Baystate will seek to eliminate some medical services at Mercy.

As regulators scrutinize this transaction, they should take the opportunity to listen to the community and figure out which services are most needed at Mercy and which services might be better provided at Baystate. For example, there might be opportunities for Baystate to move some services for less-acute patients to Mercy Medical Center, freeing up Baystate beds for those who need a higher level of specialty care. If both hospitals’ emergency departments have been consistently full, that suggests emergency services are needed in both locations. If the state believes certain services are essential, the attorney general could require those services remain open for a specified time after the acquisition. Typically, the state can monitor a transaction for up to five years.

The proposed acquisition reflects a growing trend toward consolidation of health care not just in Massachusetts but nationally. That carries a danger of increased costs because larger systems have market leverage to negotiate higher insurance reimbursement rates. But it also lets systems benefit from economies of scale, whether bulk buying supplies or sharing human resources systems.

Baystate Health has had its own financial struggles, with multiple rounds of layoffs, and regulators should seek information about how it plans to keep its existing hospitals plus Mercy in the black. Regulators should dig into the financial and market implications of the transaction and ensure high-quality services are maintained. But barring any red flags, Baystate Health is a respected, local, nonprofit hospital operator. If it can sustain Mercy Medical Center as a community hospital and prevent its closure, that effort deserves support.

Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion.