While antitrust concerns figure in the cancellation of some proposed mergers in two-hospital towns, others fall apart in hospital board rooms, long before federal investigators get involved.
Sioux City, Iowa's only hospitals have called off their proposed merger. The governing boards of 431-bed Marian Health Center and 215-bed St. Luke's Regional Medical Center said they want to remain separate.
"Both boards decided the merger wasn't going to be accomplished," said David Smetter, Marian's director of marketing and public relations.
Neither hospital would elaborate on why the talks ended, saying they agreed not to discuss the matter publicly.
"We want to avoid finger-pointing," said Janet Flanagan, a St. Luke's spokeswoman.
Marian, a Catholic facility, is run by Mercy Health Services, a Des Moines, Iowa-based subsidiary of Sisters of Mercy Corp., Farmington Hills, Mich.
St. Luke's Regional Medical Center is a stand-alone facility that is locally owned. It is loosely affiliated with the Methodist and Lutheran churches, St. Luke's executives said.
"We're seeking managed-care affiliations and we want to be part of a larger organized delivery system, but we're not talking about being purchased," Flanagan said.
Despite the disagreements, the two will continue to work on common projects. For example, a jointly owned $8 million cancer center is scheduled to open next month.
Hospital executives said their decision had nothing to do with the possibility of a lengthy federal antitrust investigation and litigation.
Sioux City, with a population of 80,000, has a market profile similar to that of Dubuque, Iowa, where two hospitals are awaiting a federal judge's ruling on a Justice Department challenge of their partnership (Dec. 19, 1994, p. 6).
Combined, the Sioux City hospitals have nearly $220 million in total assets. Marian had a net income of $4.2 million on net revenues of $101.6 million in 1993, according to the latest financial figures available from HCIA, a Baltimore-based healthcare information company.
Meanwhile, St. Luke's reported net income of $3.5 million on net revenues of $79.1 million for that year, HCIA said.
Observers of the Iowa market believe St. Luke's will attempt to link with providers in Omaha, Neb., or Des Moines, where Iowa Health System has said it hopes to link with all regions of the state.
Iowa Health System recently completed a merger with 441-bed St. Luke's Methodist Hospital in Cedar Rapids, Iowa.