Two religious systems, Sisters of Charity of St. Augustine Health System and Health Cleveland, have agreed to merge their four hospitals and 11 satellite facilities in the Cleveland area.
The resulting system could be the next provider affiliate of Blue Cross and Blue Shield of Ohio, the state's largest insurer.
The Blues this summer entered into ventures with the four-hospital Meridia Health System in the Cleveland area and with 474-bed St. Luke's Medical Center, also in Cleveland.
In both of those deals, the Blues will at some point exert majority control.
"Blue Cross and Blue Shield is basically an insurer, and its primary goal is to put together provider networks. We feel that it would want to contract with a high-quality provider network such as we're forming," said Susanna Krey, vice president of corporate development at the Augustine system.
The St. Augustine system, or CSA, owns 183-bed St. John West Shore Hospital in Westlake and 328-bed St. Vincent Charity Hospital in Cleveland.
Health Cleveland owns 453-bed Fairview General Hospital and 221-bed Lutheran Medical Center, both in Cleveland.
The Cleveland-based systems signed a letter of intent Sept. 20 to transfer their assets into a new organization, and will work out details over the next 90 days, Ms. Krey said.
Together, both systems had 11% of inpatient admissions in the Cleveland area in 1993.
CSA had considered selling to Primary Health Systems of Wayne, Pa., a new for-profit company that is trying to build a network in the Cleveland area.
This summer Primary Health announced its acquisition of 188-bed St. Alexis Hospital Medical Center in Cleveland, and its letter of intent to acquire 224-bed Deaconess Hospital of Cleveland. Primary Health also will buy Innova Medical Services, a 75-member physician group and medical center affiliated with Deaconess.
Ms. Krey said CSA felt it has a "shared mission" with Health Cleveland, whose hospitals were created by the Lutheran Church and the United Church of Christ.
Other CSA entities-including Timken Mercy Medical Center in Canton, Ohio; Providence Hospital and Providence Hospital Foundation in Columbia, S.C.; and the St. Ann Foundation in Cleveland-are not part of the planned consolidation.