- Adventist Health is in exclusive discussions to affiliatie with two hospitals in Southern California.
- The health system began discussions last month with Loma Linda University Health and San Georgonia Memorial Hospitals. These are only two of several deals that Adventist had in the works last fall.
- The health system also completed an affiliation with Lodi Health on June 1, bringing the total up to 20 hospitals in four states (California, Hawaii, Oregon and Washington) and discussions continue between Adventist and the Tehachapi Valley Health District.
Although Loma Linda University Health is already an Adventist organization, it's not part of its network of community hospitals. If the proposed deal goes through, Adventist and Loma Linda would help San Georgonia Memorial Hospital complete construction of a facility that would increase hospital bed capacity from 77 to 91. "We are still exploring the governing structure," Adventist spokeswoman Rita Waterman told the Sacramento Business Journal. "A lot of new relationships are emerging with hospitals and payers, even those that were at one point competitors."
Adventist is not alone in seeking to improve efficiencies and market power through affiliations as opposed to more traditional mergers and acquisitions. In 2014, three North Carolina hospitals—Wake Forest Baptist Medical Center in Winston-Salem, WakeMed Health & Hospitals in Raleigh and Vidant Health in Greenville—announced the creation of a new shared-services operating company; in 2013, nearly 30 hospitals in New Jersey, Pennsylvania and New York formed AllSpire Health Partners, the largest such alliance in the nation with hospitals worth a total of more than $10 billion.
Perhaps the most notable example of this kind of partnership strategy is Tenet, who is actively seeking affiliations with nonprofit organizations:
"I'd characterize our strategy now as developing our ambulatory and services business, and further developing our core acute care business, but not through acquisitions alone," CEO Trevor Fetter told The Advisory Board. "That's a tool that's available to us, but we're much more interested in expanding and solidifying our geographic footprint through innovative partnerships with well-respected not-for-profit organizations."
Want to read more? You may enjoy this story about how Tenet is leveraging partnerships and acquisitions to foster organic growth.