Or­lando Health bucks merger trend, will go it alone

Modern Healthcare - - REGIONAL NEWS - —Bob Her­man

While large re­gional and na­tional health sys­tems con­tinue to look for ac­qui­si­tion tar­gets, one Florida sys­tem that has got­ten its fi­nan­cial house in or­der has opted to go it alone, at least for now.

Or­lando (Fla.) Health de­cided last week not to merge or af­fil­i­ate with an­other sys­tem af­ter sev­eral months of eval­u­a­tion. The sys­tem lost more than $9.5 mil­lion on op­er­a­tions in its fis­cal 2013 ended Sept. 30. It has since posted a $26.6 mil­lion op­er­at­ing sur­plus in the quar­ter ended March 31. For the first half of fis­cal 2014, it tal­lied a $57.5 mil­lion op­er­at­ing sur­plus, com­pared with a $2.4 mil­lion loss in the year-ago pe­riod.

The $1.9 bil­lion, not-for-profit sys­tem had hired con­sult­ing firm Kauf­man Hall this year to eval­u­ate a “full range of part­ner­ships,” Dianna Mor­gan, Or­lando Health’s board chair, said in an in­ter­view. Those op­tions range from a looser clin­i­cal part­ner­ship, sim­i­lar to what the sys­tem al­ready has with the Univer­sity of Florida Health in Gainesville, to a full-scale merger.

Or­lando Health eval­u­ated eight to 12 or­ga­ni­za­tions, in­clud­ing re­gional sys­tems and na­tional chains, Mor­gan said. Be­cause of con­fi­den­tially agree­ments, Mor­gan could not dis­close their names. It’s un­likely in-town com­peti­tor Florida Hos­pi­tal was part of the ne­go­ti­a­tions, how­ever, be­cause the two sys­tems com­bined con­trol about 87% of in­pa­tient ad­mis­sions in Or­lando’s tri-county area.

Or­lando Health, par­ent of Or­lando Re­gional Med­i­cal Cen­ter, won’t pur­sue an af­fil­i­a­tion.

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