Here, in alphabetical order, are 15 systems that have exhibited significant growth and made great strides in the past five years. Some of them were unknown five years ago while others are familiar names that kept expanding and, in many cases, took a new direction.
Banner Health (Phoenix)
This 22-hospital system, from the 1999 merger of Samaritan Health System and Lutheran Health System, reports investing more than $1 billion to expand and build hospitals in the past several years.
Strategies. "Our growth is based on the fact that we have a product that people want to buy," said President and CEO Peter S. Fine. "If we have a better product, the business will follow." Barry Hendin, MD, chairman of Banner Health's board of directors, said the system's push for quality improvement is key to its growth strategy. "Not just increase access to care, but improve the quality of care," Dr. Hendin said. "That is what Banner has been about."
Recent activities. In June 2010, Banner Good Samaritan Medical Center in Phoenix broke ground on a $71 million expansion of its surgical services department, adding seven operating rooms and 40 pre- and post-surgical beds. In Nov. 2010, the system opened Banner Ironwood Medical Center in San Tan Valley, Ariz., and 146-bed Cardon Children’s Medical Center in Mesa, Ariz., part of a $356 million expansion of Banner Desert Medical Center. Banner's $107 million M.D. Anderson Banner Cancer Center is scheduled to open in late 2011.
Carolinas HealthCare System (Charlotte, N.C.)
Already the largest healthcare system in the Carolinas, with 29 hospitals, this non-profit organization is developing a new model of outpatient facility that borrows features from the hospital and clinic models.
Strategies. To heighten its presence in the region and reduce demand on its hospital-based EDs, Carolinas is investing more than $103 million to build a chain of free-standing emergency facilities called pavilions. The pavilions offer emergency care and market other services in patients' communities. Carolinas' network of employed physicians has grown to 1,400 practitioners at 500 locations. The system also continues to expand the number of hospitals it manages or is affiliated with.
Recent activities. CMC-Steele Creek, opened in late 2009, was the first of the system's new pavilions, which are smaller than a community hospital yet larger and more sophisticated than a medical office building or urgent care facility. Also in 2009, Carolinas HealthCare began managing the two-hospital MedWest Health System in Clyde and Silva, N.C., and in 2010 it signed an affiliation agreement with two-hospital AnMed Health in Anderson, S.C.
The Cleveland Clinic
Noted as a model physician-led integrated system, the Cleveland Clinic has been signing a wide variety of arrangements with payors and providers in its region and in other markets from Upstate New York to the Middle East.
Strategies. Recently it has been offering employer-based plans a bundled payment arrangement for care. Its physicians are increasingly working in teams and consulting healthcare data. In July 2009, the clinic named dual operating officers for medical and non-medical operations in an effort to better integrate operations. In 2010, it formed the Quality Alliance, in which the clinic and physicians will meet certain quality benchmarks for payors.
Recent activities. In 2009, the Medina (Ohio) General Hospital joined the clinic, and the clinic announced plans to build Cleveland Clinic Abu Dhabi, to be completed in the fourth quarter of 2012. In July 2010, the clinic signed a cardiac surgery affiliation agreement with Central DuPage Hospital in Winfield, Ill. In Nov. 2010, the clinic's Hillcrest Hospital in Mayfield Heights, Ohio, began a $163 million expansion and its Community Physician Partnership said it would coordinate care with insurance provider Medical Mutual of Ohio. Also in November, Kaleida Health in Buffalo, N.Y., hired the Clinic to consult on its heart care program.
Community Health Systems (Franklin, Tenn.)
Community Health's daring $3.3 billion bid for Tenet Healthcare in December was just one of several efforts to expand in 2010. Having already accumulated 26 hospitals in 29 states, this for-profit is No. 81 on the Fortune list of the 100 fastest growing companies.
Strategies. The Tenet bid is a departure from the company's usual strategy, which is to buy small hospitals in communities with limited or no competition. Fitch, the ratings firm, said while Community Health has sometimes leveraged considerable debt to carry out its purchasing strategy, it has successfully integrated large acquisitions in the past. But following the Tenet announcement, Fitch placed Community Health on "Rating Watch Negative," noting that the proposed purchase would add $4 billion in debt.
Recent activities. In 2007, Community Health became the largest publicly traded hospital company in the United States with its purchase of Texas-based Triad Hospitals for $5.1 billion, assuming $1.7 billion in debt held by Triad. The hospitals it bought in 2010 were 124-bed Marion (S.C.) Regional Healthcare System, 265-bed Bluefield (W.Va.) Regional Medical Center and two-hospital Forum Health, with 744 beds. It is also bidding to lease 130-bed Beaufort Regional Health System in Washington, N.C. Tenet immediately rejected the December bid, but Community Health is now pursuing a hostile takeover.
Johns Hopkins Health System (Baltimore)
In just three years, this prestigious academic system grew from two hospitals in Baltimore to a regional system of six hospitals with a foothold in Florida, with a growing interest in the Latin American market.
Strategies. Hopkins' acquisitions typically ask to be acquired. "We did not go out searching for hospitals," Edward D. Miller, CEO of Johns Hopkins Medicine, the system's parent, said in Nov. 2010. However, "once they do approach us, are we going to sell ourselves and say that we can bring value? The answer is, yes, we can. We have a lot of expertise built in that we can share." Hopkins Health System President Ron Peterson said the system is looking for "an integrated, regional approach to care." About its new foothold in Florida, Hopkins said it provides a "potentially important new market … not only for patients in the region but also for Central and South America and the Caribbean."
Recent activities. In 2009, the system acquired 239-bed Suburban Hospital in Bethesda, Md., and 275-bed Howard County General Hospital in Columbia, Md. In 2010, it announced acquisitions of 259-bed All Children's in St. Petersburg, Fla. and 362-bed Sibley Memorial Hospital in Washington, D.C. Johns Hopkins Hospital in Baltimore is in the middle of a $1 billion redevelopment of its campus. Scheduled to open in 2012, the Sheikh Zayed Tower and the Charlotte R. Bloomberg Children’s Center Tower will feature 560 private rooms, 33 new ORs and a large ED.
Kettering Health Network (Dayton, Ohio)
Retiring CEO Frank Perez grew Kettering Health Network in his 16-year tenure from one hospital to more than 60 facilities, including six hospitals, soon to be seven. The health system now holds a 42.6 percent market share in its home county.
Strategies. A key objective of this not-for-profit network is put all residents in its nine-country service area within a 10-minute drive of one of its facilities. Kettering has been involved in some innovative partnerships. In Feb. 2010, it proposed to partner with for-profit Health Management Associates to run a county-owned hospital, CMH Regional Health System. Mr. Perez said Kettering would provide the financial strength to relieve the hospital's long-term financial debt, but the deal went to RegionalCare Hospital Partners instead.
Recent activities. In 2009, Kettering acquired a 50 percent stake in the Medical Center at Elizabeth Place, a physician-owned hospital in Dayton, allowing its physician-owners to continue running day-to-day operations. Fort Hamilton Hospital in Hamilton, Ohio, joined Kettering in July 2010. In October, flagship Kettering medical Center opened a $77 million heart hospital. In August, Kettering's Grandview Medical Center started construction on a $40 million, five-story addition and 11 primary care physicians joined the system. Kettering's new, 90-bed Beavercreek Medical Center will open in 2012.
McLaren Health Care Corp. (Flint, Mich.)
In a financially decimated part of Michigan but backed by an unusually high bond rating (AA with Fitch in 2010), McLaren has been slowly building market share in its 22-county service area from 29.9 percent in 2006 to 31 percent in 2009.
Strategies. Its high bond rating and operating margins ranging from 2.9 to 3.3 percent in recent years gives McLaren the means to acquire a string of hospitals. It increased its level of unrestricted cash and investments by 33 percent from $510 million to $680 million June 30. McLaren is a highly integrated system that even runs a managed care plan, which achieved significant recognition from the National Committee of Quality Assurance.
Recent activities. In 2006, McLaren acquired what is now 288-bed Mount Clemens (Mich.) Regional Medical Center. In 2007, it acquired 310-bed POH Regional Medical Center in Pontiac, Mich. In 2008, McLaren and Oakland Physicians Medical Center, a physician group, bought and reopened a bankrupt hospital in Pontiac, Mich., renaming it 336-bed Doctors Hospital of Michigan. McLaren owns a 35 percent stake in the for-profit hospital. In Sept. 2010, McLaren acquired 118-bed Central Michigan Community Hospital in Mount Pleasant. In Oct. 2010, Physician Organized Healthcare System changed its name to McLaren Physician Hospital Organization.
Northshore University HealthSystem (Evanston, Ill.)
Northshore, encompassing Chicago's wealthy northern suburbs, has gained attention in the past few years as it changed its name, acquired a fourth hospital, expanded its multispecialty group and took advantage of its sophisticated IT network.
Strategies. "We stress the fact that we are a system of care, not just one place of care," President & CEO Mark R. Neaman said in 2009. "Patients can come to any of our facilities or doctor's offices and receive consistently high-quality service and care." This non-profit was an early adopter of electronic medical records, installing a system in 2003. Using NorthShore's new patient portal, NorthShoreConnect, patients can now look up their lab results, send e-mails to their physician, make an appointment, cancel an appointment, request a medication refill, pay a bill and change insurance coverage. Northshore operates a multispecialty group with more than 600 physicians operating at more than 75 sites.
Recent activities. In 2008, the system rechristened itself from its previous Evanston Northwestern Healthcare, reflecting a change in academic affiliation from Northwestern University to the University of Chicago. In 2009 it acquired Skokie Hospital, formerly Rush North Shore Medical Center. In Aug. 2010, it launched NorthShore Neurological Institute, involving more than 50 specialists providing medical and surgical care for a range of brain and spine conditions. In Jan. 2011, 12-physician North Shore Cardiologists will formally join NorthShore Medical Group.
Novant Health (Winston-Salem, N.C.)
While this nine-hospital system acquired hospitals and planned new ones, it also widened its outpatient offerings by buying a chain of diagnostic imaging services three years ago and building up Novant Medical Group.
Strategies. This non-profit system is regionally diversified, with no single market accounting for more than 41 percent of total revenue. Its hospitals have the leading or second leading share in their markets. Novant Medical Group has almost 1,100 physicians in 359 locations, serving 3.9 million patients a year. Novant has also been using its chain of diagnostic imaging services to strengthen its presence in key markets and gain a foothold in new ones.
Recent activities. In 2007, Novant bought for $45 million MedQuest, a national provider of diagnostic imaging services, two-thirds of which are in or near Novant's region. In 2008, the system entered into an agreement with Health Management Associates to own a 27 percent share of seven HMA hospitals in North Carolina and South Carolina. In July 2009, it acquired Prince William Health System in Manassas, Va., agreeing to invest more than $240 million to build a new hospital, open a cardiac catheterization lab and recruit 50 new specialist physicians. Though it was denied a certificate of need to build a 41-bed hospital in Holly Springs, N.C., Novant won a CON to build an $8.2 million, 3-OR ambulatory surgery center in the same town.
Providence Health & Services (Renton, Wash.)
Providence, one of the nation's largest Catholic healthcare organizations, has been adding hospitals and physician practices and becoming more integrated. Providence Physician Services, part of Providence Health Care in Spokane, Wash., has doubled in size in recent years.
Strategies. John Koster, MD, president & CEO of Providence Health & Services, has grown the organization from 19 hospitals when he assumed leadership in 2004 to 27 hospitals today. Providence, which runs a health plan, is aiming to become yet more integrated. "The patients of our clinics and hospitals come from all over the place, and not necessarily through our primary care network or our health plan," Mr. Koster told HFM Magazine in August 2010. Providence physicians are represented on the system's standardized clinical practice task force to create a set of best practices. Providence Healthcare in Spokane has is planning a coordinated delivery system to better align hospitals and physicians and partner with payors.
Recent activities. In 2006, Providence Health System merged with Providence Services in Washington state and changed its name to Providence Health & Services in 2007. Recently the system has been acquiring several cardiology practices. In Spokane, Providence and Group Health announced in December they are planning to develop a healthcare delivery system with the goal of providing integrated care. Providence Health System and three other health systems have united to form the Distribution Operations Center to consolidate their supply-chain support and distribution services.
RegionalCare Hospital Partners (Brentwood, Tenn.)
Founded in 2009 by Nashville-based executives with a great deal of background buying hospitals, this new for-profit has acquired three hospitals so far.
Strategies. Chairman and CEO Martin S. Rash was COO for Community Health Systems, where he helped grow the company from 10 to 41 hospitals. Mr. Rash launched RegionalCare with $300 million from the private equity firm Warburg Pincus. Looking for hospitals in non-urban markets where there is generally less competition, the new system is getting a lot of interest. "What we were hearing consistently was that community hospitals were having a very difficult time with capital formation," Mr. Rash said in 2009. RegionalCare's management style is decentralized, with hospitals retaining some autonomy.
Recent activities. In 2010, RegionalCare bought 84-bed Ottumwa (Iowa) Regional Health Center, two-hospital Coffee Health Group, and 150-bed Clinton Memorial Hospital in Wilmington, Tenn. In these deals, RegionalCare committed itself to such projects as upgrading an information system, hiring physicians, renovating clinical service areas and building a replacement hospital.
Sanford Health (Sioux Falls, S.D.)
In the past three years, Sanford Health has undergone a name change and merged with another system. This not-for-profit is now the largest employer in North and South Dakota, with 30 hospitals and a network of clinics serving five states.
Strategies. In 2007, Sanford changed its name from Sioux Valley Health System, in honor of donor Denny Sanford. Two years later it merged with MeritCare, which had seen its first year of losses in a century, due to the recession. The new system's motto is, "Stronger together." Its main rivals are Mayo Clinic and Avera Health, also based in Sioux Falls. Sanford is also building new hospitals and hiring more physicians. "We can add value for patients, be proactive in healthcare reform and attract talent, including doctors, nurses and other health professionals," CEO & President Kelby Krabbenhoft said in Nov. 2010.
Recent activities. The 2009 merger with MeritCare brought in 27 regional clinics and two hospitals. From June to August 2010, Sanford recruited 75 physicians, compared with its previous pace of hiring 60-70 in a whole year. One of those acquisitions was 13-physician Orthopaedic Associates in Fargo, N.D., completed in Oct. 2010. In Nov. 2010, Sanford announced plans to acquire 80-bed North Country Health Services in Bemidji, Minn. It also plans to build a new clinic in Mayville, N.D., and new hospitals in Thief River Falls, Minn. and in Fargo.
Scott & White Healthcare (Temple, Texas)
Nationally recognized as a model for integrated healthcare delivery, Scott & White has been acquiring small hospitals, managing others and is planning to build a new hospital. The system operates 10 hospitals, employs 800 physicians and scientists in 60 clinics, and runs a health plan with 200,000 members.
Strategies. Alfred B. Knight, the president and CEO of Scott & White for 10 years, plans to retire in 2011. "Key for me has been recruiting and developing the senior leaders that can enable this organization to achieve maximum productivity and growth," Dr. Knight said in 2008. "Truly integrating operations with the medical performance piece has been powerful for Scott & White." Using powerful IT systems, "department heads and senior executives examine nursing hours per adjusted occupied beds, average daily census, throughput, and other indicators on a frequent and rigorous basis," he said.
Recent activities. Scott & White is planning a 58,000-square-foot expansion project for its Round Rock (Texas) Hospital and a new 143-bed hospital in College Station, Texas. It acquired 25-bed Johns Community Hospital in Taylor, Texas, in Sept. 2010 and plans to take control of 30-bed Llano (Texas) Memorial Hospital and its clinics in Jan. 2011. In addition, Scott & White has been partnering with and Lone Star Circle of Care to run a series of clinics for the underserved.
Sentara Healthcare (Norfolk, Va.)
With eight hospitals serving southeastern Virginia and northeastern North Carolina, this not-for-profit system has maintained high financial ratings while building up its IT systems, boosting its physician network and building more hospitals.
Strategies. IT networks at six Sentara hospitals have achieved Stage 7 recognition by HIMSS Analytics. When Moody's gave Sentara an aa2 rating in March 2009, it praised the system's growing market share and its "balanced approach to financing capital needs, resulting in relatively low debt." The system's Optima Health unit provides HMO coverage and other health insurance products to about 350,000 Virginians. Sentara started a specialist-recruitment wave five years ago when it brought its first interventional cardiologist on board. The system now has more than 380 employed physicians and more than 55 mid-level providers.
Recent activities. In July 2009, Optima started a pilot project providing Virginia state employees with targeted health, prevention and clinical care services. Sentara Williamsburg (Va.) Regional Medical Center recruited 66 physicians, many of whom are specialists, in a period of 15 months. The 145-bed Sentara Williamsburg opened in 2006, as a $96.4 million replacement of Williamsburg Community Hospital. In 2009, Sentara acquired 183-bed Potomac Hospital in Woodbridge, Va., and it is building 120-bed Sentara Princess Anne, in Virginia Beach, Va., scheduled to open in 2011. The system is plans to acquire Rockingham Memorial Hospital in Harrisonburg, Va., investing $275 million in the hospital.
Vanguard Health Systems (Nashville, Tenn.)
Although Vanguard's $1.5 billion purchase of Detroit Medical Center is one of the largest ever, this system was active in other markets as well this year. This for-profit system, founded in 1997, currently operates 18 hospitals in Arizona, San Antonio, the Chicago area and Massachusetts.
Strategies. Relying on funds from the Blackstone Group, which has a majority stake in the company, Vanguard buys and develops locally branded healthcare delivery networks. While many hospital for-profits tend to focus on small, self-contained markets, Vanguard specializes in urban markets. Chairman and CEO Charles Martin Jr. cut his teeth at HCA, then took over 104 poorly performing hospitals that HCA spun off as HealthTrust in 1987.
Recent activities. Vanguard announced it would buy eight-hospital Detroit Medical Center in March 2010 and worked the rest of 2010 completing the deal in a state wary of for-profit systems but in need of a white knight to save its recession-ravaged healthcare system. In Aug. 2010, Vanguard purchased 152-bed West Suburban Medical Center in Oak Park, Ill., and 126-bed Westlake Community Hospital in Melrose Park, Ill., from struggling Resurrection Health Care. Vanguard also announced plans to buy 45-bed Athol (Mass.) Memorial Hospital and Arizona Heart Hospital in Phoenix from MedCath Corp.
Banner Health (Phoenix)
This 22-hospital system, from the 1999 merger of Samaritan Health System and Lutheran Health System, reports investing more than $1 billion to expand and build hospitals in the past several years.
Strategies. "Our growth is based on the fact that we have a product that people want to buy," said President and CEO Peter S. Fine. "If we have a better product, the business will follow." Barry Hendin, MD, chairman of Banner Health's board of directors, said the system's push for quality improvement is key to its growth strategy. "Not just increase access to care, but improve the quality of care," Dr. Hendin said. "That is what Banner has been about."
Recent activities. In June 2010, Banner Good Samaritan Medical Center in Phoenix broke ground on a $71 million expansion of its surgical services department, adding seven operating rooms and 40 pre- and post-surgical beds. In Nov. 2010, the system opened Banner Ironwood Medical Center in San Tan Valley, Ariz., and 146-bed Cardon Children’s Medical Center in Mesa, Ariz., part of a $356 million expansion of Banner Desert Medical Center. Banner's $107 million M.D. Anderson Banner Cancer Center is scheduled to open in late 2011.
Carolinas HealthCare System (Charlotte, N.C.)
Already the largest healthcare system in the Carolinas, with 29 hospitals, this non-profit organization is developing a new model of outpatient facility that borrows features from the hospital and clinic models.
Strategies. To heighten its presence in the region and reduce demand on its hospital-based EDs, Carolinas is investing more than $103 million to build a chain of free-standing emergency facilities called pavilions. The pavilions offer emergency care and market other services in patients' communities. Carolinas' network of employed physicians has grown to 1,400 practitioners at 500 locations. The system also continues to expand the number of hospitals it manages or is affiliated with.
Recent activities. CMC-Steele Creek, opened in late 2009, was the first of the system's new pavilions, which are smaller than a community hospital yet larger and more sophisticated than a medical office building or urgent care facility. Also in 2009, Carolinas HealthCare began managing the two-hospital MedWest Health System in Clyde and Silva, N.C., and in 2010 it signed an affiliation agreement with two-hospital AnMed Health in Anderson, S.C.
The Cleveland Clinic
Noted as a model physician-led integrated system, the Cleveland Clinic has been signing a wide variety of arrangements with payors and providers in its region and in other markets from Upstate New York to the Middle East.
Strategies. Recently it has been offering employer-based plans a bundled payment arrangement for care. Its physicians are increasingly working in teams and consulting healthcare data. In July 2009, the clinic named dual operating officers for medical and non-medical operations in an effort to better integrate operations. In 2010, it formed the Quality Alliance, in which the clinic and physicians will meet certain quality benchmarks for payors.
Recent activities. In 2009, the Medina (Ohio) General Hospital joined the clinic, and the clinic announced plans to build Cleveland Clinic Abu Dhabi, to be completed in the fourth quarter of 2012. In July 2010, the clinic signed a cardiac surgery affiliation agreement with Central DuPage Hospital in Winfield, Ill. In Nov. 2010, the clinic's Hillcrest Hospital in Mayfield Heights, Ohio, began a $163 million expansion and its Community Physician Partnership said it would coordinate care with insurance provider Medical Mutual of Ohio. Also in November, Kaleida Health in Buffalo, N.Y., hired the Clinic to consult on its heart care program.
Community Health Systems (Franklin, Tenn.)
Community Health's daring $3.3 billion bid for Tenet Healthcare in December was just one of several efforts to expand in 2010. Having already accumulated 26 hospitals in 29 states, this for-profit is No. 81 on the Fortune list of the 100 fastest growing companies.
Strategies. The Tenet bid is a departure from the company's usual strategy, which is to buy small hospitals in communities with limited or no competition. Fitch, the ratings firm, said while Community Health has sometimes leveraged considerable debt to carry out its purchasing strategy, it has successfully integrated large acquisitions in the past. But following the Tenet announcement, Fitch placed Community Health on "Rating Watch Negative," noting that the proposed purchase would add $4 billion in debt.
Recent activities. In 2007, Community Health became the largest publicly traded hospital company in the United States with its purchase of Texas-based Triad Hospitals for $5.1 billion, assuming $1.7 billion in debt held by Triad. The hospitals it bought in 2010 were 124-bed Marion (S.C.) Regional Healthcare System, 265-bed Bluefield (W.Va.) Regional Medical Center and two-hospital Forum Health, with 744 beds. It is also bidding to lease 130-bed Beaufort Regional Health System in Washington, N.C. Tenet immediately rejected the December bid, but Community Health is now pursuing a hostile takeover.
Johns Hopkins Health System (Baltimore)
In just three years, this prestigious academic system grew from two hospitals in Baltimore to a regional system of six hospitals with a foothold in Florida, with a growing interest in the Latin American market.
Strategies. Hopkins' acquisitions typically ask to be acquired. "We did not go out searching for hospitals," Edward D. Miller, CEO of Johns Hopkins Medicine, the system's parent, said in Nov. 2010. However, "once they do approach us, are we going to sell ourselves and say that we can bring value? The answer is, yes, we can. We have a lot of expertise built in that we can share." Hopkins Health System President Ron Peterson said the system is looking for "an integrated, regional approach to care." About its new foothold in Florida, Hopkins said it provides a "potentially important new market … not only for patients in the region but also for Central and South America and the Caribbean."
Recent activities. In 2009, the system acquired 239-bed Suburban Hospital in Bethesda, Md., and 275-bed Howard County General Hospital in Columbia, Md. In 2010, it announced acquisitions of 259-bed All Children's in St. Petersburg, Fla. and 362-bed Sibley Memorial Hospital in Washington, D.C. Johns Hopkins Hospital in Baltimore is in the middle of a $1 billion redevelopment of its campus. Scheduled to open in 2012, the Sheikh Zayed Tower and the Charlotte R. Bloomberg Children’s Center Tower will feature 560 private rooms, 33 new ORs and a large ED.
Kettering Health Network (Dayton, Ohio)
Retiring CEO Frank Perez grew Kettering Health Network in his 16-year tenure from one hospital to more than 60 facilities, including six hospitals, soon to be seven. The health system now holds a 42.6 percent market share in its home county.
Strategies. A key objective of this not-for-profit network is put all residents in its nine-country service area within a 10-minute drive of one of its facilities. Kettering has been involved in some innovative partnerships. In Feb. 2010, it proposed to partner with for-profit Health Management Associates to run a county-owned hospital, CMH Regional Health System. Mr. Perez said Kettering would provide the financial strength to relieve the hospital's long-term financial debt, but the deal went to RegionalCare Hospital Partners instead.
Recent activities. In 2009, Kettering acquired a 50 percent stake in the Medical Center at Elizabeth Place, a physician-owned hospital in Dayton, allowing its physician-owners to continue running day-to-day operations. Fort Hamilton Hospital in Hamilton, Ohio, joined Kettering in July 2010. In October, flagship Kettering medical Center opened a $77 million heart hospital. In August, Kettering's Grandview Medical Center started construction on a $40 million, five-story addition and 11 primary care physicians joined the system. Kettering's new, 90-bed Beavercreek Medical Center will open in 2012.
McLaren Health Care Corp. (Flint, Mich.)
In a financially decimated part of Michigan but backed by an unusually high bond rating (AA with Fitch in 2010), McLaren has been slowly building market share in its 22-county service area from 29.9 percent in 2006 to 31 percent in 2009.
Strategies. Its high bond rating and operating margins ranging from 2.9 to 3.3 percent in recent years gives McLaren the means to acquire a string of hospitals. It increased its level of unrestricted cash and investments by 33 percent from $510 million to $680 million June 30. McLaren is a highly integrated system that even runs a managed care plan, which achieved significant recognition from the National Committee of Quality Assurance.
Recent activities. In 2006, McLaren acquired what is now 288-bed Mount Clemens (Mich.) Regional Medical Center. In 2007, it acquired 310-bed POH Regional Medical Center in Pontiac, Mich. In 2008, McLaren and Oakland Physicians Medical Center, a physician group, bought and reopened a bankrupt hospital in Pontiac, Mich., renaming it 336-bed Doctors Hospital of Michigan. McLaren owns a 35 percent stake in the for-profit hospital. In Sept. 2010, McLaren acquired 118-bed Central Michigan Community Hospital in Mount Pleasant. In Oct. 2010, Physician Organized Healthcare System changed its name to McLaren Physician Hospital Organization.
Northshore University HealthSystem (Evanston, Ill.)
Northshore, encompassing Chicago's wealthy northern suburbs, has gained attention in the past few years as it changed its name, acquired a fourth hospital, expanded its multispecialty group and took advantage of its sophisticated IT network.
Strategies. "We stress the fact that we are a system of care, not just one place of care," President & CEO Mark R. Neaman said in 2009. "Patients can come to any of our facilities or doctor's offices and receive consistently high-quality service and care." This non-profit was an early adopter of electronic medical records, installing a system in 2003. Using NorthShore's new patient portal, NorthShoreConnect, patients can now look up their lab results, send e-mails to their physician, make an appointment, cancel an appointment, request a medication refill, pay a bill and change insurance coverage. Northshore operates a multispecialty group with more than 600 physicians operating at more than 75 sites.
Recent activities. In 2008, the system rechristened itself from its previous Evanston Northwestern Healthcare, reflecting a change in academic affiliation from Northwestern University to the University of Chicago. In 2009 it acquired Skokie Hospital, formerly Rush North Shore Medical Center. In Aug. 2010, it launched NorthShore Neurological Institute, involving more than 50 specialists providing medical and surgical care for a range of brain and spine conditions. In Jan. 2011, 12-physician North Shore Cardiologists will formally join NorthShore Medical Group.
Novant Health (Winston-Salem, N.C.)
While this nine-hospital system acquired hospitals and planned new ones, it also widened its outpatient offerings by buying a chain of diagnostic imaging services three years ago and building up Novant Medical Group.
Strategies. This non-profit system is regionally diversified, with no single market accounting for more than 41 percent of total revenue. Its hospitals have the leading or second leading share in their markets. Novant Medical Group has almost 1,100 physicians in 359 locations, serving 3.9 million patients a year. Novant has also been using its chain of diagnostic imaging services to strengthen its presence in key markets and gain a foothold in new ones.
Recent activities. In 2007, Novant bought for $45 million MedQuest, a national provider of diagnostic imaging services, two-thirds of which are in or near Novant's region. In 2008, the system entered into an agreement with Health Management Associates to own a 27 percent share of seven HMA hospitals in North Carolina and South Carolina. In July 2009, it acquired Prince William Health System in Manassas, Va., agreeing to invest more than $240 million to build a new hospital, open a cardiac catheterization lab and recruit 50 new specialist physicians. Though it was denied a certificate of need to build a 41-bed hospital in Holly Springs, N.C., Novant won a CON to build an $8.2 million, 3-OR ambulatory surgery center in the same town.
Providence Health & Services (Renton, Wash.)
Providence, one of the nation's largest Catholic healthcare organizations, has been adding hospitals and physician practices and becoming more integrated. Providence Physician Services, part of Providence Health Care in Spokane, Wash., has doubled in size in recent years.
Strategies. John Koster, MD, president & CEO of Providence Health & Services, has grown the organization from 19 hospitals when he assumed leadership in 2004 to 27 hospitals today. Providence, which runs a health plan, is aiming to become yet more integrated. "The patients of our clinics and hospitals come from all over the place, and not necessarily through our primary care network or our health plan," Mr. Koster told HFM Magazine in August 2010. Providence physicians are represented on the system's standardized clinical practice task force to create a set of best practices. Providence Healthcare in Spokane has is planning a coordinated delivery system to better align hospitals and physicians and partner with payors.
Recent activities. In 2006, Providence Health System merged with Providence Services in Washington state and changed its name to Providence Health & Services in 2007. Recently the system has been acquiring several cardiology practices. In Spokane, Providence and Group Health announced in December they are planning to develop a healthcare delivery system with the goal of providing integrated care. Providence Health System and three other health systems have united to form the Distribution Operations Center to consolidate their supply-chain support and distribution services.
RegionalCare Hospital Partners (Brentwood, Tenn.)
Founded in 2009 by Nashville-based executives with a great deal of background buying hospitals, this new for-profit has acquired three hospitals so far.
Strategies. Chairman and CEO Martin S. Rash was COO for Community Health Systems, where he helped grow the company from 10 to 41 hospitals. Mr. Rash launched RegionalCare with $300 million from the private equity firm Warburg Pincus. Looking for hospitals in non-urban markets where there is generally less competition, the new system is getting a lot of interest. "What we were hearing consistently was that community hospitals were having a very difficult time with capital formation," Mr. Rash said in 2009. RegionalCare's management style is decentralized, with hospitals retaining some autonomy.
Recent activities. In 2010, RegionalCare bought 84-bed Ottumwa (Iowa) Regional Health Center, two-hospital Coffee Health Group, and 150-bed Clinton Memorial Hospital in Wilmington, Tenn. In these deals, RegionalCare committed itself to such projects as upgrading an information system, hiring physicians, renovating clinical service areas and building a replacement hospital.
Sanford Health (Sioux Falls, S.D.)
In the past three years, Sanford Health has undergone a name change and merged with another system. This not-for-profit is now the largest employer in North and South Dakota, with 30 hospitals and a network of clinics serving five states.
Strategies. In 2007, Sanford changed its name from Sioux Valley Health System, in honor of donor Denny Sanford. Two years later it merged with MeritCare, which had seen its first year of losses in a century, due to the recession. The new system's motto is, "Stronger together." Its main rivals are Mayo Clinic and Avera Health, also based in Sioux Falls. Sanford is also building new hospitals and hiring more physicians. "We can add value for patients, be proactive in healthcare reform and attract talent, including doctors, nurses and other health professionals," CEO & President Kelby Krabbenhoft said in Nov. 2010.
Recent activities. The 2009 merger with MeritCare brought in 27 regional clinics and two hospitals. From June to August 2010, Sanford recruited 75 physicians, compared with its previous pace of hiring 60-70 in a whole year. One of those acquisitions was 13-physician Orthopaedic Associates in Fargo, N.D., completed in Oct. 2010. In Nov. 2010, Sanford announced plans to acquire 80-bed North Country Health Services in Bemidji, Minn. It also plans to build a new clinic in Mayville, N.D., and new hospitals in Thief River Falls, Minn. and in Fargo.
Scott & White Healthcare (Temple, Texas)
Nationally recognized as a model for integrated healthcare delivery, Scott & White has been acquiring small hospitals, managing others and is planning to build a new hospital. The system operates 10 hospitals, employs 800 physicians and scientists in 60 clinics, and runs a health plan with 200,000 members.
Strategies. Alfred B. Knight, the president and CEO of Scott & White for 10 years, plans to retire in 2011. "Key for me has been recruiting and developing the senior leaders that can enable this organization to achieve maximum productivity and growth," Dr. Knight said in 2008. "Truly integrating operations with the medical performance piece has been powerful for Scott & White." Using powerful IT systems, "department heads and senior executives examine nursing hours per adjusted occupied beds, average daily census, throughput, and other indicators on a frequent and rigorous basis," he said.
Recent activities. Scott & White is planning a 58,000-square-foot expansion project for its Round Rock (Texas) Hospital and a new 143-bed hospital in College Station, Texas. It acquired 25-bed Johns Community Hospital in Taylor, Texas, in Sept. 2010 and plans to take control of 30-bed Llano (Texas) Memorial Hospital and its clinics in Jan. 2011. In addition, Scott & White has been partnering with and Lone Star Circle of Care to run a series of clinics for the underserved.
Sentara Healthcare (Norfolk, Va.)
With eight hospitals serving southeastern Virginia and northeastern North Carolina, this not-for-profit system has maintained high financial ratings while building up its IT systems, boosting its physician network and building more hospitals.
Strategies. IT networks at six Sentara hospitals have achieved Stage 7 recognition by HIMSS Analytics. When Moody's gave Sentara an aa2 rating in March 2009, it praised the system's growing market share and its "balanced approach to financing capital needs, resulting in relatively low debt." The system's Optima Health unit provides HMO coverage and other health insurance products to about 350,000 Virginians. Sentara started a specialist-recruitment wave five years ago when it brought its first interventional cardiologist on board. The system now has more than 380 employed physicians and more than 55 mid-level providers.
Recent activities. In July 2009, Optima started a pilot project providing Virginia state employees with targeted health, prevention and clinical care services. Sentara Williamsburg (Va.) Regional Medical Center recruited 66 physicians, many of whom are specialists, in a period of 15 months. The 145-bed Sentara Williamsburg opened in 2006, as a $96.4 million replacement of Williamsburg Community Hospital. In 2009, Sentara acquired 183-bed Potomac Hospital in Woodbridge, Va., and it is building 120-bed Sentara Princess Anne, in Virginia Beach, Va., scheduled to open in 2011. The system is plans to acquire Rockingham Memorial Hospital in Harrisonburg, Va., investing $275 million in the hospital.
Vanguard Health Systems (Nashville, Tenn.)
Although Vanguard's $1.5 billion purchase of Detroit Medical Center is one of the largest ever, this system was active in other markets as well this year. This for-profit system, founded in 1997, currently operates 18 hospitals in Arizona, San Antonio, the Chicago area and Massachusetts.
Strategies. Relying on funds from the Blackstone Group, which has a majority stake in the company, Vanguard buys and develops locally branded healthcare delivery networks. While many hospital for-profits tend to focus on small, self-contained markets, Vanguard specializes in urban markets. Chairman and CEO Charles Martin Jr. cut his teeth at HCA, then took over 104 poorly performing hospitals that HCA spun off as HealthTrust in 1987.
Recent activities. Vanguard announced it would buy eight-hospital Detroit Medical Center in March 2010 and worked the rest of 2010 completing the deal in a state wary of for-profit systems but in need of a white knight to save its recession-ravaged healthcare system. In Aug. 2010, Vanguard purchased 152-bed West Suburban Medical Center in Oak Park, Ill., and 126-bed Westlake Community Hospital in Melrose Park, Ill., from struggling Resurrection Health Care. Vanguard also announced plans to buy 45-bed Athol (Mass.) Memorial Hospital and Arizona Heart Hospital in Phoenix from MedCath Corp.