Hospitals Defer Plans to Form Progressive Health

Friday, December 19, 2008

Milwaukee, WI (December 19, 2008) – Given the difficult economic times, Columbia St. Mary's and Froedtert & Community Health have deferred plans to form Progressive Health. As like-minded organizations, they will continue to collaborate on specific initiatives that improve the safety, quality and efficiency of healthcare. Economic conditions have deteriorated significantly since partnership plans were announced last year.

“The goals of the partnership remain unchanged,” said William D. Petasnick, President and CEO of Froedtert & Community Health. “We know that alignment between our two organizations is important for the future and are committed to pursuing collaboration when possible without the complexity of full integration.”

“We remain committed to this partnership,” said Leo Brideau, President and CEO of Columbia St. Mary’s. “We value the opportunity to work closely together. However, during this time of economic uncertainty, each organization must be good stewards of its financial resources and remain focused on its respective operations.”

Both Petasnick and Brideau believe the need to transform healthcare has never been clearer. They also believe that they will be better able to do this as partners. However, in the current environment, deferring action is the wise course.

According to the Wisconsin Hospital Association, the national economic downturn is affecting hospitals. The crisis gripping the financial markets has made it difficult and expensive to access capital. Hospitals are seeing declining revenues as more patients delay care and increasingly rely on charity care and government safety net programs. Two-thirds of Wisconsin hospitals report plans to cancel, delay or scale back capital projects. As prudent organizations, Columbia St. Mary's and Froedtert & Community Health are taking time to re-evaluate capital plans and retool operations to address these challenges. Columbia St. Mary’s will continue to move forward with the construction of its new hospital project in Milwaukee.

The Federal Trade Commission recently notified the parties that the Progressive Health file was closed without further request for information or action.

Discussions regarding future implementation of Progressive Health will continue but no formal timetable for finalizing the partnership has been established. In the meantime, the organizations will consider common strategies and other cost-effective measures where appropriate.



Author: Carolyn Bellin and Kathleen Schmitz

Date: Dec. 19, 2008




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