Franciscan hospital CEO: Methodist merger not certain [The Times, Munster, Ind.] - May 18, 2017

Courtesy of Pharmacy Choice • May 18, 2017

HAMMOND The new leader of three Franciscan Health hospitals in Northwest Indiana says the hospital system continues to grow, though its proposed merger with Methodist Hospitals is not a done deal.

Patrick Maloney took over as president and CEO of the Franciscan hospitals in Dyer, Hammond and Munster in October. He spoke at Wednesday’s Lakeshore Chamber of Commerce meeting at the Hammond hospital.

Maloney said that when he came to Indiana, having previously served as a hospital executive in western Cook County, he kept hearing about Indiana University Health, the largest system in the state. But he noted that Franciscan has the same bond rating as IU Health and is financially healthier in many measures.

“You have an extremely resourceful system,” he said. “When I made the move to come here last October, I saw that Franciscan Alliance was definitely well-positioned for all the changes we have coming up in health care.”

A lot of those changes are up in the air, as a bill to repeal and replace Obamacare, the 2010 health care law known as the Affordable Care Act, has gone before the U.S. Senate after passing in the House.

“Nobody has an answer right now,” Maloney said. “How can I make a five-year strategic plan when I can’t make a strategic plan for 90 days?”

Still, Franciscan is in the midst of a building boom, constructing a new Michigan City hospital scheduled to open in 2018 and cancer and joint centers on its hospital campus in Munster. In addition, Hammond is updating its birthing center, while Dyer has a new MRI unit.

An opportunity for further growth is Franciscan’s proposed merger with Methodist Hospitals, which has campuses in Gary and Merrillville. In March, the two entities signed a 120-day letter of intent to explore a partnership.

“The analogy I joked about is we agreed to date and let’s see if we want to take it to the next level,” Maloney said.

He said two obstacles stand in the way of a deal: the Federal Trade Commission and a consent decree that requires Methodist to invest equally inside and outside of Gary.

The FTC has opposed mergers of competing hospitals in recent years. In March, the commission helped stop a proposed merger between Advocate Health Care and NorthShore University Health System, arguing it would have given them a virtual monopoly in Chicago’s North Shore, reducing the quality and increasing the cost of care.

Maloney contended that many Northwest Indiana residents with commercial health insurance seek care in Chicago, while community hospitals like his and Methodist treat a higher percentage of patients with Medicaid or no coverage at all.