Meridia Health System in Cleveland plans to merge with Cleveland Clinic Foundation. The not-for-profit system had earlier rejected offers from for-profit suitors Columbia/HCA Healthcare Corp., Primary Health Systems and Tenet Healthcare Corp. The decision had come down to Cleveland Clinic and another local not-for-profit, University Hospitals Health System. Meridia cited Cleveland Clinic's international reputation as a multispecialty academic medical center. Meridia and the foundation are now drafting a final agreement and expect to complete the merger process by year-end or early 1997.
Tenet Healthcare Corp. has entered negotiations with Palm Springs, Calif.-based Desert Hospital District for a long-term operating lease of Desert Hospital. Tenet officials indicated late last week the company would sign a letter of intent after ratification is received from Desert's board and that a takeover would be completed within 90 days of signing. Santa Barbara, Calif.-based Tenet operates 130-bed John F. Kennedy Medical Center in nearby Indio, Calif. The 398-bed Desert Hospital has lost $9.6 million since 1994. It had been seeking an alliance or merger for several months.
The chief executive of Fresno-based Community Hospitals of California left the organization last week after his contract was not renewed by its board of directors. A spokesman said Bruce M. Perry headed Community for the past five years. He wouldn't say why Perry's contract wasn't renewed, other than to indicate it was part of a restructuring effort. Phil Hinton, M.D., who previously held a senior management position at Community, has been named interim CEO. Aside from Perry, John Thomas, head of Community's marketing department, and two other executives were let go. Community operates five hospitals in central California. It took over management of Valley Medical Center of Fresno from Fresno County on Oct. 1.
One of the last large regional buying groups, AllHealth of Harrisburg, Pa., will transfer about $150 million in annual purchases to a VHA subsidiary as of Nov. 1. The affiliation covers pharmacy and materials management contracts. AllHealth serves about 300 hospitals in the mid-Atlantic states. It will maintain its membership in MAGNET, another regional group. It also will continue to provide roughly $350 million in various services, such as dietary purchasing, human resources and insurance. Many regional groups, seeking greater leverage with vendors, are joining larger national buying groups such as Irving, Texas-based VHA (Sept. 23, p. 54). VHA subsidiary HealthCare Purchasing Partners now represents five smaller groups and an estimated $750 million in annual purchases.
New York City health officials last week released a summary of proposed terms and conditions for leasing Coney Island Hospital to Wayne Pa.-based Primary Health Systems. Contrary to a letter of intent signed in June, the proposal establishes a 99-year lease period, instead of 45 years, and allows PHS-NY, the for-profit chain's New York affiliate, to renew for an additional 99 years. At closing, PHS-NY would pay $42.1 million to the New York City Health and Hospitals Corp., which currently operates Coney Island. The 10-page summary outlines the company's healthcare service and indigent-care obligations in broad terms, raising "serious questions" about how the poor and uninsured will be treated, said Judy Wessler, a representative of the Commission on the Public's Health System. A public hearing on the deal will be held at Coney Island this week .
Saratoga Community Hospital, a 198-bed facility in Detroit, will become a subsidiary of Detroit-based St. John Health System under an agreement reached last week. Saratoga, on the city's northeast side, has $57 million in assets, including several subsidiaries. In 1995, it had net income of $1.3 million on revenues of $86.3 million. St. John had net income of $27.8 million on revenues of $468.6 million for the same period. The acquisition gives St. John a total of seven hospitals in the Detroit area, plus 32 freestanding medical and specialty centers.
Loyola University Medical Center in suburban Chicago said last week it will receive a $10 million donation from Ronald McDonald House Charities to go toward expanding the hospital's pediatric care. It's the largest "non-estate gift" ever given to the medical center or its parent, Loyola University. Ronald McDonald House Charities is an affiliate of McDonald's Corp., based in nearby Oak Brook, Ill. Loyola said it would reward the donor's generosity by renaming the pediatric part of the facility "Ronald McDonald Children's Hospital of Loyola University Medical Center." The children's hospital doesn't have a separate building or campus but is located within the Loyola medical center and managed by a committee of the medical center's board of directors. Loyola began its children's hospital renovation last year by developing a new $3.5 million pediatric intensive-care unit, which is scheduled to open later this month.