The merger last week of three not-for-profit hospitals in northwest Indiana created a new regional healthcare system that will control one-third of its service market.
The merger comes at a time when out-of-state for-profit hospital chains are eyeing Indiana as fertile ground for new acquisitions (See story, p. 20). At the same time, local not-for-profits are shoring up their market shares to win better managed-care contracts.
The new Community Healthcare System, headquartered in Munster, comprises 292-bed Community Hospital, Munster; 176-bed St. Mary Medical Center, Hobart; and 188-bed St. Catherine Hospital, East Chicago.
The system was formed through the acquisition of St. Mary and St. Catherine from Hobart-based Ancilla Systems by Community's parent, the Community Foundation of Northwest Indiana. Terms of the sale, which was completed Oct. 17, were not disclosed. But Community recently closed a $145 million financing deal to fund the purchase (Oct. 15, p. 30).
St. Catherine and St. Mary will maintain their Roman Catholic identity even as their ownership changes to a secular system. Ancilla is sponsored by Donaldson, Ind.-based Poor Handmaids of Jesus Christ.
Ancilla, which had operated as many as seven hospitals in Indiana and Illinois, has been divesting its acute-care facilities and focusing on community-based health projects. Ancilla Chairwoman Sister Kathleen Quinn said her system now operates only one acute-care hospital, 119-bed St. Mary's Hospital of East St. Louis (Ill.).
The sale of St. Catherine and St. Mary has been pending since last November, when the parties signed a letter of intent. Three months of due diligence followed, and the sale recently received federal antitrust clearance.
Combined, the three hospitals have annual revenue exceeding $550 million and staff about 900 physicians. Donald Powers, Community's chairman, president and chief executive officer, said there are no plans for layoffs among the combined hospitals' nearly 4,000 employees.