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Health systems here rush to form alliances — but not with each other

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It's common wisdom that health care reform is driving hospital and health system consolidation, and certainly there has been a lot of activity in that industry. Nearly every health care entity in Central Pennsylvania has proposed or approved some kind of new relationship recently.

Notably, however, most of those relationships haven't been with each other. And most have not been full consolidations.

Instead, the entities largely have been reaching farther afield, forging bonds designed to foster synergies and enable coordinated care — but not constitute actual mergers or acquisitions.

One reason for the general structure of these arrangements is clear: With organizations generally commanding a sizable share of the health care markets in their areas, getting the necessary approvals to merge with or acquire a neighbor is a high or, in some cases, unattainable bar. Less-comprehensive agreements access the power of broader network while maintaining strong local control.

"Because of our large market share, we were obviated from integrating Ephrata (Community Hospital) into our health system, which has been our desire," said Tom Beeman, president and CEO of Lancaster General Health.

However, York-based WellSpan Health, which has most of its presence on the other side of the Susquehanna River, announced this month that its proposed affiliation with Ephrata has gotten a green light and will be official Oct. 1.

That news was followed last week by word that WellSpan and LG Health have joined five other organizations in Pennsylvania and New Jersey to form AllSpire Health Partners, the nation's largest health care alliance. Their goals are very similar to that of an accountable care organization: Improving the experience for the patient, improving the health of the population and creating more affordable health care.

But, Beeman said, AllSpire wasn't formed as an ACO, because each member "either has or is developing an ACO locally."

Here's a rundown of other significant recent industry activity.

• Camp Hill-based Holy Spirit Health System announced Sept. 9 that it is pursuing an affiliation with Montour County-based Geisinger Health System. Holy Spirit, a Catholic nonprofit, would maintain local control but work closely with the larger system, which is known for its integrated care model.

• Harrisburg-based PinnacleHealth System said Aug. 29 that it formed River Health ACO with several other health systems with a goal of participating in the Medicare Shared Savings Program. Pinnacle also announced in May that it has entered into exclusive partnership negotiations with Huntingdon-based J.C. Blair Health System.

• Florida-based Health Management Associates Inc. and Tennessee-based Community Health Systems Inc. announced in July that they entered a definitive merger agreement in which CHS would acquire HMA for approximately $7.6 billion. However, the deal was subject to shareholder approval, and just weeks later, Glenview Capital Management LLC, the largest shareholder in both companies, convinced HMA shareholders to remove and replace the entire HMA board, casting doubt on the arrangement's prospects.

HMA has three hospitals in Cumberland and Lancaster counties: Carlisle Regional Medical Center, Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center.

CHS has one local facility, Memorial Hospital in York, which it acquired last year.

• The Good Samaritan Health System in Lebanon said in June that it is seeking a strategic alliance to better position itself for the demands of health care reform. It has not yet named the potential partner but indicated that it aimed to have some news this fall.

• Finally, Penn State Milton S. Hershey Medical Center announced in May that it signed a pediatric hospitalist agreement with Moses Taylor Hospital in Scranton to staff its newly expanded pediatric unit. The deal closely resembled Penn State Hershey's May 2012 agreement with Lancaster General Hospital and its July 2012 oncology affiliation with Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center.

Penn State Hershey also has had its LionNet stroke system that, since July 2012, has grown to include seven telemedicine affiliates, including Hanover Hospital, Good Samaritan, CRMC and Memorial. And in December it signed a collaborative agreement to have its physicians provide cardiothoracic surgery at Holy Spirit.

At a glance

Here’s a quick overview of the important health system relationships forged recently:

• Lancaster General Health, WellSpan Health and five others: AllSpire Health Partners, an alliance

• WellSpan and Ephrata Community Hospital: Affiliation

• PinnacleHealth System and other systems: River Health ACO

And here are some that have been proposed:

• Holy Spirit Health System and Geisinger Health System: Affiliation

• Health Management Associates Inc. and Community Health Systems Inc.: Merger

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