COLUMBIA: Swaps Hospitals With Alexian Brothers System

      Alexian Brothers Health System Inc. and Columbia/HCA Healthcare Corp. announced yesterday they have agreed to exchange Alexian Brothers Hospital in San Jose, CA, and an undisclosed amount of cash for two Columbia-owned hospitals in Illinois, the Chicago Sun-Times reports. Alexian Brothers pursued the acquisition of the two Illinois hospitals -- Hoffman Estates Medical Center and Columbia Woodland Hospital -- as part of an overall "focus on operating health care facilities in the Midwest." The deal comes in the wake of Columbia's decision "to sell or spin off as many as one-third of its 340 hospitals in a restructuring that has followed a federal investigation of alleged Medicare and Medicaid fraud by the company." Following the transaction, Columbia will be left with only two of its original five acute-care facilities in the Chicago area -- La Grange Memorial and Olympia Fields Osteopathic. Columbia agreed to sell an additional two Chicago-area hospitals -- Grant Hospital and Michael Reese Medical Center -- earlier this year (Pauly, 8/20). The Chicago Tribune reports that Adventist Health System, the owner of Hinsdale Hospital, "is close to announcing the acquisition of La Grange Memorial Hospital" (Japsen, 8/20).

Focus On The Midwest
      Following completion of the deal, Alexian Brothers has plans to develop long-term care facilities for the elderly at the two Illinois hospitals (Chicago Sun-Times, 8/20). The Chicago Tribune reports that the swap will boost Alexian Brothers' presence in the Chicago market. Brother Tom Keusenkothen, president-designate at Alexian Brothers Health System, notes that the deal follows the Roman Catholic Congregation's decision to leave a less influential position in San Jose, in favor of consolidating its operations in Chicago. "Having all this in the Midwest may help us attract new brothers to the congregation because we will have a concentration in the Midwest," said Keusenkothen, emphasizing a goal that is particularly important when the group is "facing a decline in the number of brothers to run its hospitals." Dean Grant, senior vice president for corporate offices at Alexian Brothers, said, "We concluded there were no benefits in us having two acute-care hospitals 2,000 miles apart" (Jaspen, 8/20).