A Roman Catholic hospital in Rockford, Ill., that helped the U.S. Justice Department block the merger of its two closest competitors said late last Friday it now intends to merge with one of the other two hospitals.
Saint Anthony Medical Center announced plans last week to merge with 298-bed SwedishAmerican Hospital, also in Rockford.
In 1988, SwedishAmerican's proposed merger with Rockford's third hospital, 401-bed Rockford Memorial Hospital, prompted the Justice Department to file the first-ever antitrust lawsuit aimed at blocking a merger of two not-for-profit hospitals.
In that case, Saint Anthony opposed the SwedishAmerican-Rockford Memorial merger and supplied information to the Justice Department to help make its case against the hospitals.
The Justice Department prevailed in the case in federal court, and the two hospitals were forced to abandon their merger plans in 1990.
SwedishAmerican now intends to merge into Saint Anthony's parent system, OSF Healthcare System. Peoria, Ill.-based OSF operates seven hospitals in Illinois and Michigan. SwedishAmerican would become part of an OSF region that also includes 210-bed Saint Anthony and 57-bed Saint Joseph Hospital in nearby Belvidere.
In the Rockford market, Saint Anthony and SwedishAmerican control about 56% of staffed acute-care beds, according to the latest American Hospital Association data. Saint Anthony earned $4.6 million on net patient revenues of $96.8 million in 1995, and SwedishAmerican earned $9.7 million on net patient revenues of $107.5 million, according to HCIA, a Baltimore-based healthcare information company.
The hospitals said they expect federal scrutiny of the merger, but they believe they can demonstrate savings of $80 million over five years. Merging hospitals often use claimed efficiencies to justify high-market-share mergers (See related story, p. 23).
Rockford Memorial recently began negotiating a potential partnership with Mayo Health System of Rochester, Minn. Those negotiations are expected to last six to nine months.