Keeping with its plans to stretch statewide as Iowa's largest healthcare network, Des Moines-based Iowa Health System will merge with another hospital, 191-bed Allen Memorial Hospital in Waterloo.
Allen will give Iowa Health System a fourth hospital, combined assets of more than $550 million and combined system revenues of more than $460 million annually, executives said.
"If you're not going to merge, we don't want to talk to you," Iowa Health System President David Ramsey said late last month. "If it isn't going to be a full-asset merger, you might as well go away."
Iowa Health System was created in 1993 through the merger of two Des Moines hospitals, 616-bed Iowa Methodist Medical Center and 319-bed Iowa Lutheran Hospital. Earlier this year, 426-bed St. Luke's Methodist Hospital in Cedar Rapids completed its merger with the system (Feb. 13, p. 48).
The merger will make it easier for managed-care firms and large employers to contract with one healthcare system rather than several different providers.
Executives at Iowa Health System confirmed they are talking to five other Iowa hospitals about full-asset mergers. They wouldn't reveal which hospitals, but they are likely to be in remaining major markets such as Sioux City and Dubuque (See related story, this page).
Executives are seeking federal approvals for the merger. No challenges are expected because Allen controls less than 50% of the Waterloo-area market, which includes only one other hospital, 302-bed Covenant Medical Center.
Iowa Health System is governed by a statewide board of directors. Each hospital in the system keeps its own board and will be represented on the system board.