Anticipating the only two hospitals in Dubuque, Iowa, may lose their merger case to the U.S. Justice Department, other healthcare systems want to attract them as partners.
MODERN HEALTHCARE has learned that at least one Iowa system has discussed merger prospects with one of the Du-buque hospitals. Meanwhile, the two hospitals await a federal judge's ruling on the Justice Department's effort to block their consolidation.
"We're looking at Dubuque," said David Ramsey, president of Des Moines-based Iowa Health System. "We've got five communities we're looking at in our efforts to reach statewide."
Hospitals considering joint ventures are anxiously waiting for U.S. District Judge Michael Melloy's ruling on the Justice Department's suit against 320-bed Mercy Health Center and 124-bed Finley Hospital. The trial in Cedar Rapids, Iowa, ended five months ago, and Melloy has yet to issue a written decision.
Iowa Health System executives wouldn't confirm which hospital they're interested in.
Kevin Rogols, president and chief executive officer at Finley, said the hospitals are hopeful the judge's ruling will favor the Dubuque partnership, but the hospital is looking at other options.
"We have a lot invested in the Du-buque Regional Health System, but we also realize the judge might not favor it," Rogols said. "We have to plan for the future."
Sister Helen Huewe, Mercy's president and CEO, said it has no plans to join another system. Mercy's parent company, Sisters of Mercy Health Corp. of Farmington Hills, Mich., owns several hospitals in Iowa.
Sisters of Mercy and Finley Tri-States Health Group of Dubuque, Finley's parent, signed a partnership agreement in February allowing each to maintain its assets and identity.
The Justice Department rejected the hospitals' representation of the deal, considered it an all-out merger and sued the hospitals, stating that federal law bars acquisitions that would reduce competition.
Unlike the Dubuque merger, which would result in control of more than 90% of the market, a system from outside northeast Iowa would only control about half the market and would be based several miles away. The Justice Department has looked more favorably on such combinations.
For example, St. Luke's Methodist Hospital, which has a market share of more than 60% in Cedar Rapids, had little problem merging with Iowa Health System, located 21/2 hours away from Des Moines. Dubuque is even further away from Des Moines.
David Ettinger, a Detroit attorney representing the Dubuque hospitals, wouldn't comment on discussions his clients may be having with other hospitals.
"There's no reason to believe we're not going to win," Ettinger said. "Everybody's optimistic."