Three of North Carolina's largest not-for-profit healthcare systems are discussing an alliance that would involve coordinating services and jointly pursuing service contracts with payers.
The possible three-way deal continues the wave of regional hospital consolidation rolling through North and South Carolina.
The players in the latest North Carolina transaction are five-hospital, 1,454-bed Carolinas HealthCare System in Charlotte; 756-bed North Carolina Baptist Hospital in Winston-Salem; and 669-bed Pitt County Memorial Hospital in Greenville.
The seven hospitals involved in the deal are geographically dispersed but would give the consolidated organization a strong market position in the central part of the state (See map).
In a prepared statement, the systems said the goal of the alliance "would be to reduce healthcare costs by undertaking joint projects, avoiding duplicate services, sharing administrative and support services, and pursuing managed-care opportunities."
However, spokesmen for the systems said it's too early to know what formal structure the systems would implement for their alliance.
"We're very early in the discussions," said Scott White, a Carolinas spokesman. "It's impossible to say what form the alliance might take."
White also said there's no timetable for the discussions. "Things will happen in their own time," he said.
In one partnership model that's become popular among hospitals in North and South Carolina, the hospitals operate as a merged organization without relinquishing their ownership or historic assets.
The model has been popular in the region because of the prevalence of county-owned facilities. Publicly operated hospitals often find it easier politically to consolidate with privately owned hospitals under a partnership model rather than merging assets and sharing governance with them.
Pitt County Memorial and Carolinas are publicly operated hospitals. North Carolina Baptist is a private not-for-profit facility.
Despite being run by a public hospital authority, Carolinas has been one of the most aggressive hospital systems in the state. Last year, it acquired two competing hospitals in the Charlotte-area market for $115 million: Mercy Hospital in Charlotte and Mercy Hospital South in nearby Pineville. It also took over 172-bed Valdese (N.C.) General Hospital by assuming the hospital's $13.5 million in outstanding debt.
Carolinas also is negotiating a joint venture arrangement with 129-bed Richmond Memorial Hospital in Rockingham, N.C. Carolinas and Richmond would form a company to operate the hospital with Carolinas holding a majority interest in the venture.
Jan Stivers, a Richmond Memorial spokeswoman, said the two sides hope to draft a final agreement by Oct. 1. They have been working on the deal since May.