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St. Vincent nears another 'merger'

April 9, 2012

St. Vincent Health is nearing another merger—of sorts.

The Indianapolis-based hospital system is working with Evansville-based St. Mary's Health System to mesh some of their corporate functions.

The two systems are already closely related. Both are part of the massive St. Louis-based Ascension Health system of Catholic hospitals. And St. Vincent CEO Vince Caponi already oversees St. Mary’s strategy, if not its operations.

But now the leaders of the two systems plan to embrace each other even more tightly as a way to deal with a cost crunch hospitals fear is coming. They will officially merge on July 1, according to a statement by St. Mary’s CEO Timothy Flesch reported by the Evansville Courier & Press.

"We have power and synergy if we do this together," Flesch said. He emphasized, however, that St. Mary's would retain its local board of directors and its name.

St. Vincent already has 19 hospitals in its chain, as well as part ownership of the Rehabilitation Hospital of Indiana. St. Vincent facilities boast more than 1,700 inpatient beds and more than 13,000 employees.

St. Mary’s has hospitals in Evansville and Boonville, which combined have 498 inpatient beds and about 4,000 employees, according to the Courier & Press.

Under the new arrangement, Flesch told the Courier & Press, he expects “no appreciable job loss.” But by combining their purchasing, contracting and recruiting functions, the two systems could negotiate better deals with suppliers and health insurers, and perhaps make stronger job offers to talented doctors and executives.

Both systems will have their finance, human resources, strategic planning and business development departments working from the same set of policies and procedures, the newspaper reported.

St. Mary's and St. Vincent will also examine whether they should integrate their computer systems, which now operate from separate platforms.

The two systems may use telemedicine more frequently, allowing St. Mary's patients to consult with St. Vincent's specialists through video conferencing.

St. Vincent has been competing vigorously with Indianapolis-based Indiana University Health to acquire hospitals around the state not only to feed patients to their massive Indianapolis complexes, but also to help achieve economies of scale.

With public and private health insurance plans pushing them to accept stagnant payments and also take on more risk for keeping patients healthy, all hospitals are looking for ways to operate more efficiently.

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