The Savannah, Ga., healthcare market is getting a little tighter. Two of the city's three hospitals have agreed to form a joint operating company.
After six months of review, the boards of 305-bed St. Joseph's Hospital and 335-bed Candler Hospital voted earlier this month to form St. Joseph's/Candler Health System in an effort, they say, to reduce costs.
Together, the highly profitable hospitals will control 56% of the acute-care beds in Savannah and the surrounding Chatham County area.
St. Joseph's currently controls 27% of the market. The Catholic hospital earned $13.5 million on total revenues of $91 million in 1995, according to HCIA, a Baltimore-based healthcare information company.
Candler, meanwhile, controls 29% of the market. Affiliated with the United Methodist church, Candler earned $19.1 million on total revenues of $151.3 million in 1995, according to HCIA.
The new system's main competitor will be another not-for-profit hospital, 509-bed Memorial Medical Center, which controls the remaining 44% of Savannah's acute-care market. Memorial earned $22.7 million on total revenues of $488.5 million in 1995.
A spokesman for the medical center said Memorial is being "low-key" about its opinion of the deal and waiting to hear the government's response, adding that "this is not a done deal." The merging hospitals have filed their required pre-merger notification documents with the Federal Trade Commission, and they expect a decision by month's end.
While they plan to jointly control their facilities, the hospitals said they want to continue operating their foundations separately and to retain their present religious ties.