Three major Denver area hospitals said last week that they will link up in an integrated delivery network, a move likely to transform the local marketplace.
The hospitals are 312-bed Lutheran Medical Center in Wheat Ridge, Colo., a western Denver suburb; 250-bed Rose Medical Center in the eastern part of the city; and 512-bed Saint Joseph Hospital in downtown Denver. Together, they control 27% of inpatient discharges in the Denver area, and their annual net revenues total nearly $500 million.
They will sign an affiliation agreement by June 30 that spells out how the hospitals will consolidate resources. Each hospital still will be governed independently, said James Willard, Lutheran's president.
The network has been under discussion for two months, Mr. Willard said. It will extend the hospitals' existing collaboration in a jointly owned managed-care organization, called "The Healthcare Initiative."
"What this represents is a much bigger commitment of financial resources," said Dean Coddington, a Denver-based healthcare consultant.
Last year, the fourth hospital in THI, 328-bed Swedish Medical Center, left when it merged with 746-bed P/SL Healthcare System to form HealthOne, Denver's largest system with annual revenues of $700 million. Swedish had linked THI to Denver's south side.
Although it lacks a southern hospital, the proposed network stands a good chance of success, Mr. Coddington said. "These three hospitals probably have the strongest financial position of any three in Denver," he said.
Also, each hospital is part of a physician-hospital organization, with a total of 930 physicians. With physician involvement, the network would present a stiff challenge to HealthOne and other providers, Mr. Coddington said.
A HealthOne spokeswoman said, "It's hard to say whether it will affect us until we see the scope of it."