The boards of two Lansing, Mich., hospitals have approved a memorandum of understanding that could lead to a merger, further consolidating the market.
The measure, approved by the boards of 509-bed Michigan Capital Medical Center and 211-bed St. Lawrence Hospital and Healthcare Services, could turn what was a four-hospital market less than 17 months ago into a two-hospital town.
The city has a population of 123,000.
"The rationale behind what we're doing is there are roughly 1,200 beds in the Lansing area, and half are full on any given day," said Mark Holoweiko, corporate director of public relations for Michigan Capital Medical Center.
Executives will decide late this summer whether there will be a merger. At that time, they will begin preparations for federal and state antitrust investigations, executives said.
The venture would control two of the three hospitals remaining in the market and of 57% of the acute-care beds. That would leave 458-bed Sparrow Hospital with the remaining 43%, according to 1993 American Hospital Association statistics.
"There needs to be some thoughtful, well-planned reduction of the systems in this area, (a reduction) that hopefully doesn't disrupt the lives of the employees," Mr. Holoweiko said.
Michigan Capital Medical Center was formed by the merger of two not-for-profit hospitals, Ingham Medical Center and Lansing General Hospital, an osteopathic facility. That merger was completed in December 1992 after three years of negotiations.
Ingham and Lansing reported combined 1992 assets of $128.6 million, according to HCIA, a Baltimore-based healthcare research firm. Meanwhile, St. Lawrence Hospital and Healthcare Services reported $75 million in assets for that same period.
Executives said St. Lawrence's parent corporation, Mercy Health Services of Farmington Hills, Mich., still has to approve the memorandum, but is expected to do so.