Pasadena-based Southern California Healthcare Systems and 212-bed Beverly Hospital in Montebello, Calif., have signed a memorandum of understanding to affiliate.
According to the deal, Beverly would maintain a separate board of directors and medical staff. But the system would control "big-ticket items," such as major financial transactions and the appointment of the affiliate's chief executive officer, said Frederick C. Meyer, the system's CEO.
Beverly will make "a healthy capital contribution" to affiliate with SCHS and pay an annual fee for an ongoing management agreement with the system, Meyer said, declining to provide specific figures.
Beverly expands the system's coverage in the southern tier of the San Gabriel Valley. With the new affiliation, not-for-profit SCHS will have annual net operating revenues of about $400 million. Its hospitals will have more than 1,800 physicians and 4,700 employees.
Joining SCHS "will position us well for the future environment in healthcare delivery and managed care," said W.W. Wilkinson, president of Beverly's board of directors.
The affiliation will help Beverly gain operating efficiencies and increase its access to capital and contracts.
SCHS consists of 584-bed Huntington Memorial Hospital in Pasadena, 282-bed Methodist Hospital of Southern California in Arcadia and 138-bed Huntington East Valley Hospital in Glendora. The system has several subsidiaries, including pharmacies, laboratories, imaging centers, skilled-nursing facilities and a medical foundation.