The breakup of the largest hospital system in Indiana has thrown the Indianapolis healthcare market into a state of flux.
The boards of 836-bed St. Vincent Hospital and Health Care Center and 822-bed Community Hospitals of Indianapolis last week decided to dissolve their healthcare network after being unable to settle on a leadership structure.
"The boards agreed that a single leadership structure was unobtainable and successful integration was not possible," a statement from the hospitals' chief executive officers said.
Community's president and CEO, William Corley, said the boards couldn't agree on how to determine which executives would stay and which would go in the new system.
"I don't think the boards found the organizations ready to make that kind of move because it was a collaboration and not a merger," Corley said.
The move comes nearly two years after the hospitals' joint operating agreement was approved by the Justice Department. "The JOA called for a review of the leadership structure, and both hospitals found they weren't ready to move to a more integrated structure," said St. Vincent president and CEO Douglas French.
The Indianapolis market had been leading up to domination by two networks: the Community-St. Vincent's network and the proposed consolidation of Methodist Hospital of Indiana and Indiana University Medical Center. The Methodist-IU venture, approved by a state task force and Gov. Evan Bayh, is scheduled to be approved by both hospitals' boards in the next month.
Combined, the two systems had $900 million in total assets and some 1,700 acute-care beds.
The fate of 428-bed St. Francis Hospital and Health Centers in suburban Beech Grove, Ind., which planned on joining the network, was unclear. The St. Francis board voted in late 1994 to join, and its JOA was about to be submitted to the Justice Department.
"It's unfortunate that they couldn't get to `yes' on the control and leadership issues," said Kevin Leahy, St. Francis' president and CEO. "We were at the point of getting our final paperwork to the Justice Department. We're going to now concentrate on our relationships with physicians and insurers."
Executives expected little opposition to the St. Francis addition, which would have given the network 45% control of Marion County's acute-care market.
Despite the collapse of the network, St. Vincent and Community will continue a joint venture for their stress management centers.