With an eye on ACOs, Methodist Health, Iowa Health System explore partnership

Methodist Health Services in Peoria, Ill., has entered into a nonbinding letter of intent to form a strategic partnership with the Iowa Health System. The move is being explored by many healthcare organizations across the country as they prepare to align with partners and potential competitors to form accountable care organizations.

"We see our future more focused on managing, taking care of a population, moving away from a very episodic, fragmented system of care to one that's more integrated with our physicians," Iowa Health System Chief Executive Officer Bill Leaver told the Des Moines Register. 

The move would add $400 million to Iowa Health's $2.3 billion annual revenue, the newspaper reports. Although neither entity is in financial straits, the pressures being wrought by healthcare reform are prompting geographically close entities to seek partnerships in order to better coordinate services.

"IHS and Methodist are a good fit together," said Leaver, whose organization is the sixth largest non-denominational health care system in the U.S. "Both are quality institutions, both are financially strong, and both are integrated with their physicians. We were searching for a hospital that would add value to our system through quality patient care and excellent patient experience."

Should the two parties move forward with an affiliation transaction, Methodist would still retain its autonomy, including keeping its current board of directors.

"The assets of the hospital and health system were created in Peoria and will stay in Peoria," said Methodist CEO Michael Bryant. "We will remain a nonprofit organization where money is reinvested in the hospital, health system and community."

For more:
- Read the Iowa Health System press release
- Read this article in the Des Moines Register