A $1.2 billion mega-merger in Chicago last week entered the home stretch toward completion, clearing hurdles that doomed the venture seven years ago.
The long-awaited consolidation of EHS Health Care of Oak Brook, Ill., and Lutheran General HealthSystem of Park Ridge, Ill., has gained approval from the federal government and both hospital systems' religious boards.
"The issue that derailed us seven years ago didn't even get on the radar screen this time," said Richard Risk, EHS' president and chief executive officer.
In 1987, the venture didn't make it to the federal approval stage. EHS' sponsor, the United Church of Christ, quashed the merger, fearing the combination would jeopardize EHS' identity.
At the time, EHS said its board encountered "a lot of concern that the identity of the United Church of Christ would become subordinated." This time, the two religious organizations are working to reach an ecumenical agreement where each acknowledges the other's beliefs.
Lutheran General's sponsor, the Evangelical Lutheran Church in America, approved the venture early last week after a meeting of its leadership council. EHS' 117-member corporate structure cast "unanimous" votes made at two readings of the agreement in the last few weeks.
Combined, the two have nearly 3,000 acute-care beds, 177 sites of care, 3,550 physicians and some 19,000 employees. The new organization is scheduled to be operational by January 1995. A new system name, management and organizational structures are due to be settled by then.
The Federal Trade Commission notified both systems last week that it won't challenge the merger, granting it early termination.
The church and federal approvals for EHS aren't good news for the for-profit giant Columbia/HCA Healthcare Corp., which made an effort to buy EHS and its five hospitals a year ago. EHS is affiliated with another hospital, which is part of the EHS/Lutheran General endeavor.
Meanwhile, Columbia/HCA's efforts to compete in Chicago have yet to materialize, a year after purchasing its sixth hospital in the market, Grant Hospital on the city's North Side.
Another religious venture in Chicago continues to remain on track. The 11 hospitals that have signed on to a network led by the Catholic Health Alliance of Metropolitan Chicago have divided up into subcommittees to study issues related to the completion of their venture.