By Dann Denny, for The Times-Mail
ddenny@heraldt.com
BLOOMINGTON - Bloomington Hospital and Clarian Health Partners were to sign an agreement today to launch an 18-month regional planning process that both sides hope will eventually lead to a full partnership.
The agreement was expected to be officially announced during a news conference at 9:30 a.m. today in Bloomington Hospital's Wegmiller Auditorium.
Clarian Health owns or is affiliated with 21 hospitals and health centers in Indiana, including Bedford Regional Medical Center, Methodist Hospital, Indiana University Hospital, Riley Hospital for Children, Clarian West Medical Center and Clarian North Medical Center.
"I'm excited and enthused," said Mark Moore, Bloomington Hospital's president and CEO. "I fully expect the two organizations will be able to culminate the integration. Our intent is to make this happen."
Moore said during the regional planning process the two health care organizations will continue to share information and become more familiar with one another through a "due diligence" process, and develop the hospital's long-range strategic health care and facilities plan for its 10-county service area.
That planning process will include input from a 25-member community task force and be spearheaded by Kaufman Hall and Associates, a national health care strategy and financial advisory firm hired by Bloomington Hospital.
"Now the real work starts," said Dan Peterson, Bloomington Hospital's board president. "Over the next 18 months, we will be planning how to most effectively deliver value-based health care to this region."
Moore said during the next 18 months either party could decide against full integration, but he considers that highly unlikely.
"We've already done a tremendous amount of due diligence, disclosing to each other a variety of different materials and data, ranging from our financial statements to our contractual obligations," he said.
Moore said if the two organizations do indeed combine, Bloomington Hospital would retain its identity, probably being called Bloomington Hospital - a Clarian Health Partner, and maintain its ability to make decisions that might be necessary to better meet the needs of area patients.
"We feel this integration will also help us attack the issue of fragmented health care by improving the cost, quality and access to health care," he said, adding that clinical experts from the Clarian system would be able to present programs and share expertise with Bloomington Hospital.
Moore said the financial strength of Clarian Health will help Bloomington Hospital address its long-range facility needs, whether that involves renovating the current facility on West Second Street or building a new hospital on an 85-acre tract of land the hospital owns off Ind. 46, northwest of its junction with Ind. 37, about 2.6 miles from the current site.
"We have not determined to build a new, free-standing hospital," Moore said. "What we've determined to do is meet our facility needs over the next decade, whatever they might be."
Moore said if, based on future discussions and research, it's determined that a new hospital is needed, a Clarian partnership would provide the hospital access to design experts and allow it to get better financing and buy construction materials less expensively due to larger economies of scale.
"Clarian has experience building new facilities on new sites as well as building new facilities on present sites," said Brian Whitman, the hospital's vice president of marketing, business development and community relations. "Clarian would bring a lot of strength with regard to facility development, no matter which way we go."
Moore said if a new hospital is built, he has no idea when that might occur, "especially in this economic climate, in which everyone is being conservative about spending capital resources."
Concerns
Bloomington Hospital officials said in December that they hoped to sign a definitive agreement with Clarian by the end of 2008. It didn't occur until today.
Moore said there were no major sticking points that slowed the process, and that the ailing economy was not causing either party to have second thoughts.
"The economic climate was not a principal block; just one more reason to be very thorough," he said. "Our board did not want to conduct the due diligence process in a hasty fashion, and with an institution the size of Clarian, it took a long time to comb through all their documents and financial records."
Like most organizations, Clarian Health Partners is feeling the effects of the economic downturn. During the first nine months of 2008, it had investment losses of $203 million, according to its most recent financial filing released to bondholders.
Clarian recently announced it was cutting the salaries of its top executives by 10 percent and halting construction work on a new $475 million, 10-story tower at the Riley Hospital for Children.
Moore said those actions give him comfort rather than pause.
"Clarian is strong organization doing what it needs to do to maintain its strength," he said. "As a future partner, that is the kind of action we would expect them to take."