Gary-based Methodist Hospitals in talks with Clarian Health Partners

GARY | Methodist Hospitals has entered into discussions with Indiana-based Clarian Health Partners  to explore how the successful nonprofit can be of help to Methodist as it struggles to keep its Northlake campus viable.

Clarian Public Affairs Manager Jon Mills confirmed a statement by interim Gary Mayor Dozier Allen that Methodist is in discussions with Clarian, a broad-based health system that owns or operates 16 hospitals and health centers throughout Indiana, the nearest being LaPorte Hospital.

Clarian's holdings include the campuses of Methodist Hospital, Indiana University Hospital and Riley Hospital for Children, which are operated as a single hospital in Indianapolis.

"We do a variety of things," Mills said. "It wouldn't be strange if some sort of arrangement were explored."

Mills said Clarian is aware of the challenges facing Methodist Hospitals' Northlake campus in Gary.

"Obviously we recognize the need, as the state does, that quality health care be delivered to that area," he said.

Mills said the discussions are still preliminary.

In a prepared statement, Methodist Hospitals said it is pursuing various options and looking at many different types of opportunities.

"No decisions have been made as far as which model will work best for us, much less on a specific business partner," the statement said.

Allen revealed Methodist and Clarian are in talks during a press conference Tuesday when he announced he will convene a meeting next week among all parties to the issue, both public and private. Invited will be former Gary mayors Scott King, Thomas Barnes and Richard Hatcher as well as hospital administrators, trustees and physicians.

Hospital officials say the facility is owed a total of $67.5 million by the state, which is withholding payment until the hospital can prove the facility is viable. Last year's losses came to about $23.6 million.

Allen said he will do everything he can to keep the facility open, but neither the Indiana Family and Social Services Administration nor the office of Gov. Mitch Daniels are optimistic about funds being released without a positive business plan.

"It may be beyond the control of the mayor's office," Allen said even though he urged participants to "bring their toothpaste and pajamas" as he may lock the door until a solution is hammered out.

Mitch Roob, secretary for the Family and Social Services Administration, said he spoke for both his agency and the governor's office when he asked Methodist to produce a sustainable business model.

"We're not withholding dollars from them," Roob said.

Payments from the Disproportionate Share Hospital (DSH) program are typically two years behind because of statutory requirements driven by the Indiana Hospital and Health Association, he said.

Of the $67.5 million owed the hospital, the majority, or $53.5 million, are DSH funds.

Roob said Methodist has asked for an "out of the ordinary" advance on its 2004 DSH payments which normally would be made this year.

"They're asking (for an advance) which we're uncomfortable making at this point," he said.

A deal with Clarian would make the decision easy because Clarian is a DSH funder and Methodist Hospitals is not, he said.

"(But) any large system would be a great choice," he said in that smaller systems can't make the necessary investments in information technology and quality measures that a large system can.

That said, Roob added the state isn't pushing for a deal with Clarian or any other system.