Sys­tems un­veil joint al­liance

Modern Healthcare - - LATE NEWS - Gregg Blesch

Five months ago, Com­mu­nity Health Sys­tems Chair­man, Pres­i­dent and CEO Wayne Smith and Cleve­land Clinic CEO Dr. Toby Cos­grove un­veiled a part­ner­ship they ex­plained as a means to marry clin­i­cal and data and ex­per­tise to im­prove qual­ity and ef­fi­ciency.

The un­usual al­liance raised an ob­vi­ous ques­tion in this era of fast, furious and anoma­lous con­sol­i­da­tion in health­care. Did they want to run hos­pi­tals to­gether? “We might get to ac­qui­si­tions in this, but this is much more about what we can do to sort of trans­form th­ese or­ga­ni­za­tions to be pre­pared for health­care re­form,” Smith told Mod­ern Health­care.

Last week, they an­nounced plans to do just that. They’re now in ex­clu­sive ne­go­ti­a­tions to be joint own­ers of Akron (Ohio) Gen­eral Health Sys­tem, which would be con­verted to a for-profit en­ter­prise.

Un­der a let­ter of in­tent, the com­pa­nies would form a new limited-li­a­bil­ity com­pany to buy and op­er­ate 474-bed Akron Gen­eral Med­i­cal Cen­ter, 38-bed Ed­win Shaw Re­ha­bil­i­ta­tion Hos­pi­tal in Cuya­hoga Falls, Ohio, and 25-bed Lodi (Ohio) Com­mu­nity Hos­pi­tal.

Other deals may be in the cards as well, Smith said in a news re­lease. “Our re­la­tion­ship also has gar­nered in­ter­est from other or­ga­ni­za­tions that rec­og­nize a unique op­por­tu­nity to ben­e­fit from the com­pelling col­lab­o­ra­tion be­tween two health­care providers that bring to­gether clin­i­cal ex­per­tise, cap­i­tal re­sources, op­er­a­tional ex­pe­ri­ence and in­no­va­tion.”

Akron Gen­eral faces in­tense com­pe­ti­tion from Summa Health Sys­tem, which has its 461bed flag­ship hos­pi­tal in Akron and four hos­pi­tals in the city’s sub­urbs. Last year, Akron Gen­eral re­ported an op­er­at­ing loss of $12.7 mil­lion on $616.3 mil­lion in rev­enue. Summa, mean­while, has a pend­ing deal that would give Catholic Health Part­ners a mi­nor­ity stake in the sys­tem.

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