After the state of Idaho experienced no hospital mergers in more than four years, two have popped up in three weeks.
Late last month Magic Valley Regional Medical Center, a county-owned 180-bed facility in Twin Falls, signed a letter of intent to buy the only other acute-care facility in town, 38-bed Twin Falls Clinic and Hospital. Terms of the proposed sale, which would create an acute-care monopoly in Twin Falls, population 35,000, weren't disclosed.
A group of 17 physicians owns the smaller, for-profit hospital, which would convert to not-for-profit status after the sale.
"The purpose is to purchase their (Twin Falls') inpatient operations with the end result to move those inpatient beds to our facility," said Magic Valley spokesman Shawn Bariger. He said it's difficult for a city the size of Twin Falls to support two acute-care hospitals.
Bariger said many of the physician owners of Twin Falls Clinic already are on staff at Magic Valley, and patients would simply go to Magic Valley for inpatient services.
Twin Falls Clinic spokesman Dennis Maughan said the physician owners have sought a partner for years and have discussed merging with Magic Valley for nearly 20 years.
"We're in a relatively small market area and have survived rather nicely the last 54 years," Maughan said. "We looked at a few different partners, but the county hospital seemed to be a perfect marriage. It's a well-led hospital with good resources and staff. And we're hoping to integrate the two into one healthcare delivery system."
Officials from both facilities said the deal already has received federal antitrust clearance and is expected to close Jan. 1.
The proposed merger in Twin Falls comes just weeks after the only two acute-care hospitals in Pocatello, Idaho, announced their intention to merge (Oct. 15, p. 15). The joining of 87-bed Pocatello Regional Medical Center, owned by Salt Lake City-based Intermountain Health Care, and county-owned 237-bed Bannock Regional Medical Center is also expected to close Jan. 1.
Idaho has only 42 acute-care hospitals, making suitable merger partners hard to find.
Idaho Hospital Association President Steven Millard said that although the Twin Falls hospitals had spoken of merging over the years, "This came totally out of the blue and surprised me and a lot of other people. What's driving it is the same factors pushing the merger in Pocatello. It's economics: rising costs and diminishing reimbursements. A lot of people think (mergers are) the right thing to do. The jury is still out whether they save or cost money."
Kent Just, executive vice president of the Twin Falls Greater Chamber of Commerce, said Twin Falls Clinic was negotiating with 281-bed Saint Alphonsus Regional Medical Center in Boise but those talks broke down. He said the business community will support the local merger if the hospitals can expand the healthcare services at the merged system and keep costs down.
"Cost containment is a big thing for our membership," Just said. "Our members are very aware of the acutely steep incline in healthcare costs. We're lucky in Twin Falls. Right now our healthcare costs are 4% to 10% below the state average. So we'll be watching cost increases very closely. And we know this gives the merged system a monopoly. But I'm not certain it will remain that way."
