Three hospital systems in Florida's Tampa Bay area signed a joint operating agreement last week to create BayCare Health System.
The systems have been working on the deal since January, and it recently was given the go-ahead by state and federal regulators, said Frank Murphy, BayCare's new president and chief operating officer.
The participating systems are Bay-front-St. Anthony's Health Care, St. Petersburg; Morton Plant Mease Health Care, Dunedin; and St. Joseph's-Baptist Health Care, Tampa.
The new network includes seven facilities covering an area that has about 2.2 million residents.
Two of the facilities won't be formal parts of the network but will participate in a nonexclusive managed-care partnership with BayCare.
Mease Hospital Dunedin and Mease Countryside Hospital in Safety Harbor are barred from joining the network under a 1994 antitrust settlement with the U.S. Justice Department. The settlement stopped Mease Health Care from merging with Morton Plant Health System but allowed the systems to share services.
The participating systems are keeping their historic assets and ownership structures, but they'll operate as a merged organization under the agreement, consolidating their managed-care contracting efforts, information systems, purchasing functions and financial systems, said Sue Brody, president of Bay-front-St. Anthony's.
Such joint operations are expected to generate $73 million in annual savings by the third year.
Under the joint operating agreement, new revenues and profits will be shared by the systems, said Murphy, former president and chief executive officer of Morton Plant Mease. Officials said they didn't know how the profits would be divided between the systems.
A 22-member board will govern BayCare, said Phil Beauchamp, who is taking over as president of Morton Plant Mease. He had been executive vice president and COO.
In addition, Tampa-based Allegany Health System, because it is the parent of St. Joseph's Hospital in Tampa and St. Anthony's Hospital in St. Petersburg, will participate in BayCare, said Isaac Mallah, president of St. Joseph's-Baptist Health Care.
Mallah said Allegany "has certain powers and rights, which have been negotiated through the joint operating agreement." He wouldn't elaborate.