Managed care is sparking a flurry of hospital alliances and consolidations in central and southern Ohio.
Dominated until now by stand-alone hospitals, these markets are seeing the geneses of their first provider networks.
In Cincinnati, "the market is shaping up into two networks with a few strong independents," said Lynn Olman, president of the Greater Cincinnati Hospital Council.
In January, 550-bed Christ Hospital and 707-bed University of Cincinnati Hospital signed an affiliation agreement. St. Luke Hospitals of Kentucky is expected to join the Christ-University alliance this summer. St. Luke has two campuses totaling 373 beds in Florence, Ky., and Fort Thomas, Ky.
The resulting network, called the Health Alliance of Greater Cincinnati, will represent 29% of the area's inpatient admissions, said Jack Cook, the alliance's president.
Also, Cincinnati's Good Samaritan and Bethesda hospitals unified their management under one not-for-profit parent corporation in February. The hospitals, with a total of 1,103 beds, will maintain their current assets and debts but share operating income and expenses.
One inter-city alliance is being discussed. The boards of 361-bed Children's Hospital Medical Center in Cincinnati and 155-bed Children's Medical Center in Dayton voted in January to study a possible merger with the aim of creating a regional pediatric system.
Cincinnati employers are driving much of the change, Olman said. They pushed hard for cost containment and have been rewarded with a flattening of premiums, she said.
Cook said employers are so vigilant about costs that his new alliance created as flat a management structure as possible, putting just four executives in its corporate office.
To the north, Dayton businesses are also motivating change.
The city's largest provider, 594-bed Miami Valley Hospital, filed a notice of intent with the state seeking approval to partner with Upper Valley Medical Centers in nearby Miami County. Upper Valley operates two acute-care hospitals-in Piqua and Troy-with a total of 287 beds.
Miami Valley and Upper Valley plan to operate under one umbrella corporation, creating the first regional network in greater Dayton.
Miami Valley also in January signed an agreement to discuss an affiliation with 458-bed Grandview Hospital and Medical Center in Dayton.
Meanwhile, Upper Valley is seeking to cut its costs by replacing its two aging facilities with a $38 million, 113-bed hospital. State approval is pending.
Industry officials in Dayton said aggression by managed-care companies-some of which have begun to exclude certain providers-national reform efforts and employer pressure have contributed to the affiliation activity. A Dayton business coalition formed its own PPO last year in an attempt to lower healthcare costs.
More consolidation is under way in Columbus. Grant Medical Center, with 408 beds, and 805-bed Riverside Methodist Hospitals, both owned by U.S. Health Corp., are merging their governance structures and will share some services.
And, 180-bed St. Ann's Hospital of Columbus in Westerville joined alliance talks in progress between two of Columbus' largest providers, 764-bed Mount Carmel Health and 404-bed Doctors Hospital.