The ProMedica hospital system finalized its purchase of fellow Toledo, OH-based HCR ManorCare, the country’s second largest post-acute and long-term care operator, in late July.
That acquisition creates a $7 billion organization, making ProMedica one of the top-15 largest U.S. health systems.
Along with HCR’s hundreds of long-term care facilities, the 13-hospital chain also owns an insurance company and employs 2,700 physicians.
Top officials said they plan to carefully coordinate care across this diverse range of care settings.
“We see it as a new way to integrate and look collectively at healthy aging and how we can use services that might exist in traditional systems a little differently,” Randy Oostra, president and CEO of ProMedica, told McKnight’s.
The hospital chain cited the aging population — with the 85-and-older demographic expected to double over the next 20 years — as a key consideration in acquiring HCR. Those growing numbers will only “exacerbate the inefficiencies of the current fragmented and costly health systems,” the company noted in its announcement.
ProMedica says it plans to invest upward of $400 million in “growth and upgrade capital” over the next five years, following finalization of the deal.
Steve Cavanaugh, the former ManorCare CEO, will serve as the president of its division in the new company. He’s excited to see what the two can accomplish as one.
“The real opportunity is taking our capabilities and putting them together,” Cavanaugh told McKnight’s. “What’s paramount is the insurance [piece from Pro-Medica], which is something we never could have replicated. It will allow us to ask, ‘How do you identify and manage risk?’ And then we can go into creative models” to deal with other insurers such as UnitedHealthcare, Humana and Aetna.