Two Roman Catholic hospitals in the Indianapolis area are considering a merger among their options for consolidation.
The sponsors of 836-bed St. Vincent Hospital and Health Care Center in Indianapolis and 428-bed St. Francis Hospital and Health Centers in suburban Beech Grove will be deciding among three options: a full-asset merger; a holding company, sponsored equally by each order; or a joint operating agreement.
"Two Catholic hospitals have a whole lot more in common than we do with potential other partners," said Kevin Leahy, president and chief executive officer of St. Francis, which is sponsored by Mishawaka, Ind.-based Sisters of St. Francis of Perpetual Adoration.
St. Vincent, sponsored by Daughters of Charity National Health System, St. Louis, has been looking for new consolidation partners ever since its network with 822-bed Community Hospitals of Indianapolis broke down earlier this year.
Combined, St. Vincent and St. Francis have annual revenues of nearly $600 million, according to 1994 and 1995 financial data from HCIA, a Baltimore-based healthcare information company. They have assets of more than $500 million and 25% market share in Marion County.
The Catholic hospitals have said they are open to some kind of arrangement with 822-bed Community Hospitals of Indianapolis, which also is looking for a partner in Marion County.
But a Community-Catholic affiliation was put into a state of flux late last week after Community's board chairman, Roy Nicholson, quit. Nicholson said he was upset with the "future direction" of the hospital after the full board rejected a consultant's recommendation to have Community merge or affiliate with other providers.
Nicholson is the second Community board chairman to step down this year. Larry Pitts resigned in February (Feb. 19, p. 16).
Should a venture with Community arise, the three hospitals' combined market share would blossom to 45%, rivaling the $1 billion merger of Methodist Hospital of Indiana and Indiana University Medical Center, both in Indianapolis. The IU-Methodist consolidation is expected to be operational by the end of the year.
"It's the intention of both the Catholic sponsors to work something out with Indianapolis Catholic facilities first," Leahy said. "We have both also extended an invitation to Community to come back to the table."
Community had been considering three options, including a link with a for-profit chain or getting back together with St. Vincent (July 22, p. 20).