More than a year after they announced a possible mergerlike partnership, two Midwestern hospital systems have decided on a more limited collaboration.
Under a memorandum of understanding, two-hospital Nebraska Health System and eight-hospital Iowa Health System said earlier this month they will work together in home health, rural development, transplants and limited aspects of managed care, and will jointly establish a research and education foundation.
In January 1998, IHS President and Chief Executive Officer Samuel Wallace said the systems hoped to form an alliance that "would have the ability to present a comprehensive package of healthcare services in metropolitan and rural locations throughout the region."
The current plan falls short of that goal. Among the initiatives originally planned but not included in last week's announcement were group purchasing and joint managed-care contracting.
Spokesmen from both systems said the agreement was a first step.
"It's a case of degree," said Jim Zahnd, vice president of public relations for IHS. "We're not at this point getting into all of them (the planned areas of collaboration) or as deeply into some of them."
Executives from both systems were unavailable for comment.
Many hospital systems in Iowa and Nebraska "are taking a look at taking steps toward developing collaborative relationships," said Stephen Brenton, president of the Association of Iowa Hospitals and Health Systems.
Both states have lately seen more hospital partnerships.
Earlier this year, Fort Dodge, Iowa-based 174-bed Trinity Regional Hospital merged with Iowa Health Systems.
In 1998, Denver-based Catholic Health Initiatives and Farmington Hills, Mich.-based Mercy Health Services created a mergerlike partnership called Mercy Health Network to link their seven Iowa hospitals. Also last year, seven-hospital Alegent Health and Tenet Healthcare Corp.'s Creighton St. Joseph Hospital Regional Healthcare System, both based in Omaha, completed a joint venture.
Pressures from managed care, which is just beginning to make inroads in Iowa, are among the reasons for partnering, Brenton said, "but Medicare changes may be the greater catalyst."