Being an independent can be good and bad.
It can be good because you can make your own decisions, but you also lose the economies of scale by having to purchase things as a single entity and not part of a large group.
War Memorial Hospital is one of only 30 independent hospitals in the state and others are looking at the facility to expand their markets, making the local health care provider a target for possible affiliation or potential sale.
“The external environment right now has a lot going on,” said hospital CEO David Jahn. “We are going through a process where we are looking at people who have approached us and would like to affiliate with us and some who would like to buy us.”
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Those comments were made Tuesday night at a community session for the hospital’s upcoming three-year strategic plan.
Jahn said five people have expressed an interest in partnering with WMH, either through affiliation or possible purchase. They include LifePoint, McLaren Health System, Munson Health System, University of Michigan Health System and Henry Ford Health System.
“LifePoint would like to come in and buy us, but the chance of that is very remote,” Jahn said of the Tenessee-based firm.
“I don’t think our board would approve it and I don’t think the county board would approve it. We ought to have local decisions made by local people.”
He said McLaren would like to affiliate with War Memorial, but also keep its options open.
“They would like to affiliate with us and eventually buy us when we decided to sell, not that we every would, but they would like first refusal,” Jahn said.
He said the other three — Munson, U of M and Henry Ford — are looking for affiliation.
“Munson Health System wants to just affiliate with us and provide us with some cost savings. University of Michigan Health System would like to affiliate with us. The question there is you pay for their brand and their logo and how much is that worth,” Jahn said. “Just recently — I am meeting with them next week — Henry Ford Health System out of Detroit is interested in affiliating with us.”
The CEO said everyone is trying to protect and grow their market share — an area which WMH has done well with locally.
However, WMH has a hard time competing with costs such as with supplies and this is where an affiliation may help.
“We could save $500,000 in supply costs,” Jahn said. “We can’t compete if we can’t get those costs down.”
Date: November 15, 2013