Rockford (Ill.) Memorial Hospital and Mayo Health System of Rochester, Minn., have downgraded their for-sure merger to a maybe-affiliation.
The transaction, which has been in the works since February, would give the famed Mayo its first holding in Illinois.
The two were supposed to complete their merger negotiations by year-end, but they've thrown their timetable out the window along with any merger plans. Neither side would say why the deal is in flux.
"The focus had moved, and we are focusing on an affiliation at this point," said Helen Brooks, Rockford Memorial spokeswoman. "We had really been working at a range of options."
"We need to define what that affiliation will be," said Mayo spokesman Chris Gade.
Rockford Memorial, with 401 staffed beds, is the largest of the city's three acute-care facilities. Mayo Health System has some 400 physicians in 13 medical groups, owns eight hospitals and manages five others in Iowa, Minnesota and Wisconsin.
If Rockford Memorial and Mayo don't form some sort of partnership, it would be bad news for the city's other two hospitals, 298-bed SwedishAmerican Hospital and 210-bed Saint Anthony Medical Center.
SwedishAmerican and Saint Anthony have proposed merging in a transaction that would give them control of about 56% of Rockford's staffed acute-care beds.
Attorneys for the hospitals recently met with antitrust officials of the U.S. Justice Department to discuss what they consider the pro-competitive effects of the merger (Sept. 1, p. 17). The hospitals intend to file their required pre-merger notification documents with the government shortly.
One factor that could offset antitrust concerns about a SwedishAmerican-Saint Anthony merger would be Mayo entering the Rockford market as a major competitor.
In a celebrated hospital antitrust case, the Justice Department stopped a proposed merger of Rockford Memorial and SwedishAmerican. Saint Anthony was the odd hospital out and opposed the merger, supplying the government with information to help make its case against Rockford Memorial and SwedishAmerican.
Now, Rockford Memorial hasn't decided whether to help the government stop Saint Anthony's deal with SwedishAmerican.
"There's been no determination made at this point," Brooks said.