The only two acute-care hospitals in Lafayette, Ind., will pursue a merger that would create a single board of directors but allow both hospitals to maintain their individual identities.
With combined assets of more than $152 million, 244-bed Lafayette Home Hospital and 206-bed St. Elizabeth Hospital Medical Center agreed last month to hire consultants to guide the hospitals to become a fully integrated healthcare system.
"There is a strength in our coming together," said Paul Hess, president of St. Elizabeth. "We need to identify ways and means to control costs, reduce costs and become more efficient."
A nine-member task force that includes executives from both hospitals has been working on the merger. Consultants will be interviewed and hired, and they'll eventually help the hospitals seek state and federal regulatory approvals.
The new system would control healthcare delivery for 100,000 people in the Lafayette area.
Consultants also will be looking at whether the hospitals will be better off merging or forming a physician-hospital organization that includes both hospitals and Lafayette physicians, said John Walling, president of Lafayette Home Hospital.
"We intend to have all members of the healthcare community have legitimate access," Mr. Walling said.
Executives said they have not yet filed pre-merger notification documents with the federal government. They said, however, that they do not expect any antitrust difficulties despite being the area's only hospital providers.
Both hospitals have been profitable, according to their 1992 financial records. Lafayette Home Hospital, owned by North Central Health Services of Lafayette, had a 1992 total profit margin of 13.56%, while St. Elizabeth, owned by Sisters of St. Francis Health Services of Mishawaka, Ind., had a total profit margin of 6.2% for the same period, according to HCIA, a Baltimore-based healthcare research firm.
In 1992, Lafayette Home Hospital reported net income of $10.8 million on net revenues of $79.8 million, while St. Elizabeth had net income of $4.7 million on $75.7 million in revenue, HCIA said.-Bruce Japsen