Orlando, Fla.-based Adventist Health System, which has built a network of 18 hospitals in the Southeast, has jumped into Illinois by merging with Hinsdale (Ill.) Health System, partly because Adventist's president once headed the Hinsdale system.
The two companies completed a merger earlier this month, just weeks after quietly receiving federal antitrust clearance for the deal (April 28, p. 20).
Both systems are owned by the Seventh-day Adventist Church and previously were linked in a national Adventist system. That system was dissolved in 1990 after being unable to meld its regions into a cohesive unit. Hinsdale and Adventist, formerly known as Adventist-Sunbelt, were two of eight regional groups formed.
Adventist President Mardian Blair said he feels the merger has promising dynamics. The old national Adventist system was a "forced marriage" driven by church leaders, but both parties are eagerly entering this new partnership, Blair said.
What's more, Blair began his career in 1958 at 449-bed Hinsdale Hospital, the flagship of the three-hospital Hinsdale system, and served as its administrator from 1963 to 1970. "I have a very warm, close feeling for this place," he said.
And Blair and Hinsdale President Ronald Sackett worked together cooperatively about two decades ago in Washington state.
The Hinsdale system, now operating as the Adventist Midwest region, also includes 186-bed GlenOaks Hospital and Medical Center in Glendale Heights, Ill., and 30-bed Chippewa Valley Hospital in Durand, Wis. It had operating income of $11.7 million on operating revenues of $210 million in 1995, according to Moody's Investors Service, a New York-based bond-rating agency.
With this merger, Adventist operates 19 hospitals, 22 nursing homes and 49 home health agencies in 14 states. It had 1995 operating income of $72.3 million on net patient revenues of $1.2 billion, according to MODERN HEALTHCARE's 1996 Multi-unit Providers Survey.
Blair said the addition of the Illinois facilities would give Adventist a stabler base.
Sackett characterized the merger as a church reorganization that would be invisible to the Hinsdale community, other than the name change. He said the merger would reduce Hinsdale Health System's cost and expand its management expertise, although potential savings haven't been quantified.
Focus groups with physicians and major employers since January prepared the medical community for the move, Sackett said. But the merger wasn't formally announced until after both boards approved it May 5.
Both executives indicated Adventist Midwest would seek other partnerships in the Chicago area, but they declined to elaborate. Adventist Midwest is launching a managed-care product, essentially a point-of-service plan, with 321-bed Central DuPage Hospital in Winfield, Ill., and AON Managed Care Partners, a new division of international brokerage and insurance firm AON, based in Chicago.