The largest hospital system in Indiana is one step closer to reality after the U.S. Justice Department last week cleared the consolidation of two Indianapolis hospital systems.
With $900 million in total assets and 1,700 acute-care beds, Community Hospitals Indianapolis and St. Vincent Hospitals and Health Services will control more than one-third of Marion County's acute-care market, executives said.
Bain Farris, president and chief executive officer at St. Vincent Hospitals and Health Services, said many industry executives think it is too difficult to link Catholic and non-Catholic hospitals, but there is no reason it can't be done.
Executives of the hospitals ironed out several ethical issues in order to proceed with the collaboration. For example, abortions no longer will be performed at Community Hospitals' east side facility, where 48 such procedures were done last year. However, all Community Hospitals will do in vitro fertilizations.
Once the joint operating agreement is signed, all of the revenue from the hospitals will come into the new holding company, Collaborative Health Services. After expenses are subtracted from operations, "We will divide the surplus by the (current) assets of each hospital," said William Corley, president of Community Hospitals. "St. Vincent's will get about 60% and Community Hospitals will get the remaining 40%."
St. Vincent Hospitals and Health Services includes St. Vincent Indianapolis Hospital and Health Care Center; St. Vincent Carmel Hospital; St. Vincent Stress Center, a center for chemically dependent and mental-health patients; and St. Vincent New Hope, an intermediate-care facility for mentally disabled people.
Community Hospitals has three facilities, one each on the city's north, east and south sides.
Both hospital systems have been profitable. In 1993, St. Vincent Indianapolis Hospital and Health Care Center had net income of $31.9 million on net revenues of $377 million, according to HCIA, a Baltimore-based research company. Community Hospitals reported net income of $18.3 million on net revenues of $248 million in 1992, the latest figures available.
On Feb. 22, the Justice Department had asked for another 30 days to review the deal but didn't take the full time. Both systems filed antitrust papers with the Justice Department Dec. 23, 1993.