Healthcare’s Consolidation Landscape

Christopher Cheney, June 1, 2017

"We have two exclusive clinical and operational affiliations. One of them is with the Berger Health System in Circleville. And effective January 1, we finalized an affiliation with Southeastern Med, which is in Cambridge in Guernsey County. With those partnerships, we make commitments to the local community to partner with them to look for efficiencies. There also is common governance. We have strategic partnership councils with both of those organizations that have their board members and executives and people from Columbus who are responsible for fulfilling our commitments," Louge says.

As is the case with OhioHealth’s acquisition deals, partnership transactions are structured as win-win scenarios for both parties.

"With Berger in Circleville, we have two employed cardiologists who are there full-time. That is something they would have struggled to do on their own. Now, we have a robust cardiac and vascular program in Circleville, which has helped that hospital and that physician community to keep the appropriate amount of cardiac care local; and when that can’t happen, patients are referred to Columbus."

IU Health rolls with hub-and-spoke organizational structure

''We have not done a full acquisition recently, and that has been intentional.''

While other healthcare organizations are consolidating, at Indianapolis-based Indiana University Health, senior executives have spent much of the past five years in a concerted effort to recast their organization after a consolidation spree, says Ryan Kitchell, executive vice president and chief administrative officer of the 14-hospital health system.

"We have not done a full acquisition recently, and that has been intentional," he says of IU Health, which posted total operating revenue at $6.2 billion for the 2016 fiscal year.

"I became CFO in 2012, and at that time we had either acquired or built a hospital on average every year for 15 years. Given that rapid pace of growth, we had not done a really deep focus on integrating what we had in our system. So, we took a timeout on acquisitions to focus on becoming a true operating company, rather than the holding company model."

IU Health now features an integrated hub-and-spoke structure, with rural "spoke" hospitals linked to regional "hub" hospitals that send patients for the highest level of care to three hospitals in Indianapolis: IU Health University Hospital, IU Health Methodist Hospital, and Riley Hospital for Children at IU Health.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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