Two-hospital Hackley Health and Mercy General Health Partners announced they are working toward a merger.
A feasibility study has been completed, and the boards signed a letter of intent and plan to file notification with federal antitrust authorities soon, according to a news release. They cited financial stability, physician recruiting and investment in technology and infrastructure as motivations for the potential deal.
Mercy Generals two campuses with a total of 230 beds and 181-bed Hackley Hospital are about three miles from one another in Muskegon, Mich. The next nearest acute-care provider is about 10 miles south in Grand Haven, Mich. Hackley also operates 24-bed Hackley Lakeshore Hospital in Shelby, Mich., 35 miles to the north.
In March, Moodys Investors Service downgraded Hackley Hospitals rating on $18.6 million in debt to Baa2 with a negative outlook, pointing to declining performancea $3 million deficit in fiscal 2006amid increasing competition. In fiscal 2007, ended June 30, the system earned $1.6 million off revenue of $231 million, spokeswoman Anita Varela said.
Mercy General is the product of a 1998 union of Mercy Hospital and Muskegon General Hospital and in 2000 became part of Trinity Health, a Catholic system based in Novi, Mich., that owns 30 hospitals and manages another 15. Hackley, meanwhile, tied its ship to Grand Rapids, Mich.-based Spectrum Health in 2000 but dissolved the relationship four years later when Spectrum moved to standardize governance of its member hospitals. -- by Gregg Blesch