Froedtert & Community Health and Columbia St. Marys, both in Milwaukee, approved a joint operating agreement that will consolidate finances and governance for two-hospital Froedtert and three-hospital Columbia St. Marys under the name Progressive Health. William Petasnick, president and chief executive officer of Froedtert, and Leo Brideau, president and CEO of Columbia St. Marys, have been appointed co-presidents of Progressive Health.
Under the deal, Froedtert and Columbia will borrow separately and maintain separate balance sheets, but the partners will jointly invest profits in operations under a formula laid out in the agreement. Each system will appoint half of Progressive Healths 16-member board. Obviously, its a unique model, Brideau said. Consolidating governance and management will allow the two systems to efficiently coordinate services, Petasnick said. Pending regulatory review, the deal is expected to close in 2008.
Froedtert includes 434-bed Froedtert Hospital, Milwaukee, and 196-bed Community Memorial Hospital, Menomonee Falls, Wis. The system reported operating income of $24.7 million on revenue of $813 million in 2006, the most recent year for which audited financial information is available.
Columbia St. Marys includes 213-bed Columbia St. Marys-Milwaukee, 248-bed Columbia St. Marys-Columbia and 117-bed Columbia St. Marys-Ozaukee, Mequon, Wis., and a rehabilitation facility. Columbia St. Marys reported net income of $45 million on revenue of $607.6 million in 2006, according to the system, a subsidiary of Ascension Health, St. Louis, the nations largest not-for-profit health system. (To read more on the resurgence of hospital joint operating agreements, see the July 16, 2007, Modern Healthcare story Havent we met before?.) -- by Melanie Evans
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