After four months of top-level negotiations, teams from Saint John's Hospital and Health Center in Santa Monica, Calif., and Santa Monica Hospital Medical Center are seeking a memorandum of understanding on a possible merger or affiliation.
"I think everybody would like to make it happen. There is tremendous optimism, and the medical staffs on both sides are very encouraging," said Thomas Herrick, M.D., vice president of business and professional affairs at Saint John's.
However, no schedule has been set for a possible deal between the not-for-profit acute-care facilities, he said.
Saint John's reopened Oct. 1 after making $32 million in repairs following the Jan. 17 Southern California earthquake, which forced the closing of the facility. The interim repairs authorized by the state are only good for five years. After that time, the facility must be either replaced or shut down, which has executives re-evaluating the hospital's strategy.
"The meter is running," Dr. Herrick said. He declined to say how much of the repair cost the state is subsidizing.
Santa Monica reopened its nine-story tower, also damaged in the quake, in early September. Repairs cost an estimated $4.5 million. Its newest building suffered minor damage and stayed open.
Even prior to the quake, senior management of both hospitals had been discussing an assessment of community needs. Santa Monica, which borders Los Angeles, has a population of 86,000. The population in the five-mile radius around the hospitals is 450,000, Dr. Herrick said.
Last year, Saint John's had 371 beds in service, for an occupancy rate of 51.13%. Santa Monica, part of the UniHealth America system, had 329 beds in service in 1993, for an occupancy rate of 36.53%. Both lost capacity in the earthquake.
Saint John's made a profit of $5.7 million on net patient revenues of $155.8 million in 1993, according to HCIA, a Baltimore-based healthcare information company. It is owned by the Sisters of Charity of Leavenworth (Kan.) Health Services Corp. Including an extraordinary nonoperating expense of $7.5 million, its 1992 profits were $8.3 million.
Santa Monica posted a $9 million loss on net patient revenues of $82.9 million in 1993, including an extraordinary loss of $4.2 million, compared with a $3.9 million profit in 1992, HCIA said.
After the quake crippled Saint John's, Santa Monica enjoyed a 30% increase in emergency patients, said Wally Ghurabi, M.D., medical director of Santa Monica's emergency center.