Toledo (Ohio) Hospital has scrapped a proposed acquisition of state-owned Medical College of Ohio Hospital, Toledo, in favor of a profit-sharing agreement, the two hospitals confirmed last week.
The hospitals decided they could achieve their goal of a cost-efficient healthcare delivery network without combining assets.
"We still consider it a merger, since we're going to be operating on the same bottom line," said Jim Winkler, director of communication for Medical College Hospital.
Details of the profit-sharing agreement weren't disclosed. It won't be completed until consultants devise a plan to integrate the hospitals' medical staffs, probably by December, Mr. Winkler said.
The 319-bed Medical College Hospital, which is affiliated with state-owned Medical College of Ohio at Toledo, employs its physicians, who also have teaching and research duties at the college. Toledo Hospital, with 774 beds, is the city's largest private hospital. Its physicians are in private practice.
Talks began in January, when the hospitals' boards of trustees approved an agreement in principle to merge, hoping to save $200 million over 10 years. Toledo Hospital would lease Medical College Hospital with an option to purchase it for $60 million, the boards said.
Despite the lack of a final agreement, the hospitals began cooperating in several ventures this year. They created the Children's Medical Center of Northwest Ohio on the Toledo Hospital campus and began consolidating pediatric services there.
Medical College Hospital sold its money-losing HMO, Toledo Health Plan, to Toledo Hospital's Paramount plan. And the two hospitals spearheaded development of the Lake Erie Health Alliance with about 15 hospitals in northwest Ohio.