2 Indianapolis health care giants call off deal

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News,Business

INDIANAPOLIS (AP) — Two major Indianapolis health care providers have called off their plans for a partnership, saying it would pose too many financial and legal hurdles, but they haven't given up all hope of working together.

The Indianapolis Business Journal said Eskenazi Health and Community Health Network announced Thursday that they still hope to work together, but that doing so would require a change in federal tax laws.

The pair announced plans in February 2013 to create a joint operating partnership to form common strategies, pricing and clinical efforts. The collaboration would have provided more access to primary health care than any other hospital system in central Indiana and would have been in a good position to draw business from people with fresh policies obtained through the national health insurance overhaul.

"What we initially conceived we now know is legally not possible. We regret that," Matthew Gutwein, chief executive of the Health & Hospital Corporation of Marion County, the governmental agency that is the parent of Eskenazi Health, told the Journal.

The plan ran into problems with federal antitrust laws and rules for the special bonds Eskenazi sold to finance its $754 hospital, which were part of President Barack Obama's 2009 stimulus package.

"After careful examination, the resolution of tax and bond issues would create such a cumbersome and complex structure it outweighs the advantages of integration," said a news release from the Eskenazi Health Foundation quoted in the Indianapolis Star.

Eskenazi employs about 4,000 people and serves mostly the indigent and uninsured in Indianapolis. Eskenazi's revenue was $465 million in 2013, which allowed it to break even.

Community employs 11,000 people at eight hospitals and hundreds of other health care locations around Indianapolis and in Kokomo. Its 2013 revenue was nearly $1.8 billion and profit from operations topped $54 million.

The systems hired lobbyists to petition the government to change the tax laws or the rules governing the bonds, but those efforts went nowhere.

But Community spent $25.5 million more last year on charity care than it did the previous year, and has been sending more trauma patients to Eskenazi. Thursday's news release said the two systems would continue in lesser joint efforts "to best serve the people of Indiana."

"It's not actually ended yet," Gutwein said. "We still would like to get a change in the rules."

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