Community Health Network and Westview Hospital are in talks about a “strategic alliance,” the two Indianapolis hospitals announced Thursday afternoon.
Westview, located at West 38th Street and Guion Road, said its board of directors chose Community for exclusive talks after considering several other potential partners. In a joint statement, the hospitals said they are both looking “to meet the challenge of health reform and fulfill their shared missions.”
Westview requested proposals for a strategic alliance from the four major hospitals systems in Indianapolis earlier this year. Community operates five hospitals in Indianapolis and Anderson.
The two entites are entering the “due diligence” phase, during which they will determine what form their alliance will take. Westview CEO Jon Anderson said he hopes to have a letter of intent by year's end. He would not directly say if Westview wants to remain independent or merge with Community.
"Certainly, Westview Hospital wants to continue to exist. There’s a really great heritage at this hospital," Anderson said. "Whether independence or not is the right word, we certainly want to know that we’re going to grow and prosper."
Many independent hospitals have been looking to partner with larger systems in recent years in a bid for greater efficiencies through buying power with vendors, particularly on information technology, negotiating leverage with health insurers, access to specialist physicians and more attractive financing terms for capital projects.
Westview leaders want to expand some service lines and add specialists to help take on the training of 30 new medical students each year, who will come when Marian University opens a new college of osteopathic medicine in the fall of 2012. In addition, Westview said the health reform law's encouragement of doctors and hospitals to take financial responsibility for the care of patients required Westview to find a larger partner with whom to share that risk.
"Those challenges will be better met with increased size," Anderson said. "So we think aligning and partnering with a bigger institution will help."
Westview has 67 beds and pulled in revenue of $106 million in its 2009 fiscal year, according to the website AHD.com. Community Health’s facilities have roughly 1,000 beds and pull in revenue of $1.2 billion.
“They’ve reached out to everyone to help them support what they do, and we said that we would do that,” said Mills. “We’re very supportive of their mission.”
Westview is the state’s only hospital of osteopathic medicine, which focuses especially on patients’ overall wellness. Community said it supports osteopathic medicine, and noted that it has committed $5 million toward the construction of Marian's new college of osteopathic medicine in Indianapolis.
Community has not joined the recent spate of acquisitions by Indianapolis’ two largest hospital systems, Clarian Health and St. Vincent Health.
However, Mills said Community is interested in joining forces with other hospitals in the right circumstances.
“We are interested, with the right hospitals in the right location,” he said.