A spokesman for Cleveland said it was too early to know what effect the merger will have on the affiliations, which will continue "as-is" for now.
Rather than growing through mergers and acquisitions, internationally known systems like Cleveland and Mayo Clinic in Rochester, Minn., more often build their own satellite locations or sign smaller community-based systems up to affiliations. The arrangements garner Cleveland and Mayo a new revenue stream at little cost and a potential source of patients from outside their home markets. In exchange, community systems like Cadence hope some of their partners' brand equity rubs off.
Cadence's affiliations are not the only clinical affiliations between a Chicago-area health system and a health system with a national brand and presence. In 2012, NorthShore University HealthSystem of Evanston, Ill., signed an agreement with Mayo. If the Cadence-Cleveland agreements go kaput, Cleveland likely will seek another partner in the area, Cutler said.
“There's no way they would step away from the Chicago market,” she said. “It's too big and too close.”
Anchored by 894-bed Northwestern Memorial Hospital and 201-bed Lake Forest Hospital, Northwestern posted $131 million in operating income on $1.71 billion in revenue in the year ended Aug. 31, 2013. Cadence, which was formed in 2011 when 333-bed Central DuPage merged with 159-bed Delnor Hospital in Geneva, posted $123.6 million in operating income on $1.13 billion in total revenue, according to financial statements for the year ended June 30, 2013.
Meanwhile, Cleveland has a main campus in its namesake city, eight community hospitals and dozens of other facilities in northeast Ohio, plus locations in Florida, Nevada, Toronto and Abu Dhabi. It raked in $294 million in operating income on $6.45 billion in revenue in 2013.
"Northwestern merger puts Cadence's Cleveland Clinic alliance in jeopardy" originally appeared on the Crain's Chicago Business website.