ADRIAN, Mich.-The two largest hospitals in Lenawee County have formed a joint operating agreement with the stated intent of keeping more patients in the county for care. Bixby Medical Center, a 167-bed facility in Adrian, and 105-bed Herrick Medical Center in Tecumseh, Mich., formed the Lenawee Health Alliance last month, combining their expenses and revenues as well as allowing them to share services and management. The alliance estimated that 19% of patients leave the county for nontertiary care, and employers could save $1,681 per admission by keeping that business local. "We had to find ways to compete as a team, or we would be standing on the sidelines while hospitals in Ann Arbor and Toledo, Ohio, took our customers," said John Roberstad, chief executive officer of the alliance. The hospitals, through their physician-hospital organizations, are affiliated with virtually all the physicians in the county, said Ray Miles, vice president of managed-care and physician services at Bixby. The alliance also includes two nursing homes, a home-care agency and 22-bed Thorn Hospital in Hudson, Mich. Eighteen-bed Morenci (Mich.) Area Hospital is expected to join, leaving only 24-bed Addison (Mich.) Community Hospital outside the alliance, Miles said.
ST. PAUL, Minn.-An Allina Health System executive was named head of an integrated delivery system being developed by Allina and rival HealthEast. As executive director of the network, James Reimann will be responsible for its strategic development and daily operations. Reimann, 39, was Allina's director of network services. The joint venture, announced late last year, will be the exclusive provider in the east metropolitan area for enrollees in Medical Health Plans, an arm of Allina (Nov. 20, 1995, p. 30). Allina and HealthEast will continue to compete for contracts with other payers. Minneapolis-based Allina owns or manages 18 hospitals in the Midwest, including one in St. Paul. HealthEast operates three acute-care hospitals in the St. Paul area, but it plans to close one shortly (Aug. 12, p. 4).
SIOUX CITY, Iowa-Iowa Health System has completed the acquisition of its fifth hospital, merging assets with 242-bed St. Luke's Regional Medical Center in Sioux City. With five not-for-profit hospitals, Des Moines-based Iowa Health System has more than $560 million in annual revenues and combined hospital assets of more than $692 million. The deal was given clearance this month by both the Justice Department and the Federal Trade Commission. St. Luke's, like the other system members, will merge its assets but maintain local control of operations. St. Luke's gets two seats on the Iowa Health System board, which now has 13 members. 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. Last year, 428-bed St. Luke's Hospital, Cedar Rapids, and 194-bed Allen Memorial Hospital, Waterloo, completed their entrances into the system.