ARIZONA HOSPITALS: SEEK AFFILIATE FOR STATEWIDE NETWORK
The boards of Tucson-based Health Partners of SouthernThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
Arizona and Phoenix-based Samaritan Health System will vote today
on which health care group they want as "a third partner for a
new statewide health care system." San Francisco-based nonprofit
Catholic Healthcare West (CHW) is the leading candidate because
it is "financially out in front" in the plans' search for a
"financially sound partner." OrNda HealthCorp., a for-profit
company, is also "under serious consideration" for the
partnership, while Columbia/HCA Healthcare Corp. "is reportedly
no longer in the running." Health Partners, which runs the
Tucson Medical Center, and Samaritan have already combined their
HMO operations into one group called HealthPartners Health Plans.
However, if the plans' efforts to form a statewide network fail,
the HMO operations and other plans to combine assets may be
dropped. Tucson ARIZONA DAILY STAR reports that if no agreement
is reached today, the "more likely" scenario would be "another
round of negotiations with" CHW and OrNda.
LEADER OF THE PACK: CHW, with its "$4 billion in assets,
$3.1 billion revenues, and $1.2 billion in cash," is the leading
candidate for inclusion in the networks because the two Arizona
systems have combined debts of $450 million and only $1.2 billion
in combined assets. While some Health Partners board members
think OrNda could be "much larger and stronger" in the future,
even those board members "concede" that CHW is the "more
financially stable of the two organizations" at this point.
Additionally, the California company already owns and operates
St. Joseph's Hospital and Medical Center in Phoenix.
INCREASED EFFICIENCY: If the merger with CHW goes through,
St. Joseph's and Good Samaritan Hospital, Phoenix's two largest
hospitals, will be consolidated. The move to "reduce
duplication" could combine neurology services at St. Joseph's
Barrow Neurological Institute, and heart programs at Good
Samaritan. CHW is also the parent company of Mercy Healthcare
Arizona, which has had affiliation negotiations with both the
Health Partners and Good Samaritan systems.
PROFIT ISSUE: CHW's nonprofit status is also a plus as
"legislators and others" have put pressure on the Samaritan
boards' chairs to keep the hospitals nonprofit. Support from the
Phoenix-area hospital officials has also been "leaning toward
not-for-profit," according to Samaritan Board Chair Marty Shultz.
CHW President and CEO Richard Kramer said, "Our mission is to
provide high quality, affordable health care, but to do that with
compassion, and to make our services available to everyone in the
community, regardless of their ability to pay. ... We like to
develop partnerships in the community to meet the needs of
indigents and others who fall between the cracks when it comes to
health care coverage. Our feeling is that [Health Partners] and
Samaritan feel the same way" (Erikson, 10/16).