Just weeks after completing the purchase of Iowa's last for-profit hospital, Rock Island, Ill.-based Trinity Regional Health System has set its sights on a larger role in the Hawkeye State.
The two-hospital system announced plans last week to join forces with eight-hospital Iowa Health System, Des Moines, in a mergerlike partnership expected to be completed by Oct. 1.
Through the partnership, fast-growing Trinity will have access to capital and managed-care contracts and the cachet of affiliation with Iowa's largest healthcare system.
"Being an island, as the healthcare community continues to evolve and get tougher, is not the right strategy," said Eric Crowell, Trinity's president and chief executive officer. "As a neophyte in Iowa, affiliating will give us strength."
IHS will gain entry into Iowa's second-largest metropolitan area and will have a presence in all major Iowan markets except the Omaha-Council Bluffs region, IHS President and CEO Sam Wallace said.
IHS and Trinity hospitals do not compete in any markets, and Wallace said he expects no difficulty in obtaining federal antitrust clearance.
Trinity ratcheted up the level of competition in the Quad Cities area of northwestern Illinois and southeastern Iowa on Aug. 1 when it acquired 65-bed Davenport (Iowa) Medical Center from Brentwood, Tenn.-based New American Health Corp. (July 12, p. 32). The move across the Mississippi River brought Trinity into fiercer competition with the Quad Cities' dominant player, three-hospital Genesis Health System, Davenport.
Trinity also owns 335-bed Trinity Medical Center in Rock Island and a 20-bed short-stay hospital in Moline, Ill.
Crowell said the IHS partnership was not motivated by the need for immediate capital or anything else.
"We're in the best financial shape we've been in in seven years," he said.
Assets will remain separate, but the planned consolidation of Trinity's and IHS' debt will increase Trinity's access to capital and to managed-care contracts. IHS negotiates contracts that apply to all hospitals in the network.
Trinity will have three seats on IHS' 16-member board, which will have the final say on any significant changes proposed by Trinity's local board.