Orlando Health bucks merger trend

While large regional and national health systems continue to look for acquisition targets, one Florida system that has gotten its financial house in order has opted to go it alone, at least for now.

Orlando (Fla.) Health decided last week not to merge or affiliate with another system after several months of evaluation. The system lost more than $9.5 million on operations in its fiscal 2013 ended Sept. 30. It has since posted a $26.6 million operating surplus in the quarter ended March 31. For the first half of fiscal 2014, it tallied a $57.5 million operating surplus, compared with a $2.4 million loss in the year-ago period.

The $1.9 billion, not-for-profit system had hired consulting firm Kaufman Hall this year to evaluate a “full range of partnerships,” Dianna Morgan, Orlando Health's board chair, said in an interview. Those options range from a looser clinical partnership, similar to what the system already has with the University of Florida Health in Gainesville, to a full-scale merger.

Orlando Health evaluated eight to 12 organizations, including regional systems and national chains, Morgan said. Because of confidentially agreements, Morgan could not disclose their names. It's unlikely in-town competitor Florida Hospital was part of the negotiations, however, because the two systems combined control about 87% of inpatient admissions in Orlando's tri-county area. —Bob Herman

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