University Hospitals plans to merge with Elyria-based EMH Healthcare

One of the Northeast Ohio's largest health systems may be growing.

Leaders at University Hospitals say they're in talks to buy EMH Healthcare in Lorain County.

EMH has a flagship hospital in Elyria and a handful of health centers. The potential deal would give UH a stronger presence in Cleveland's west side suburbs, including Avon and Sheffield Village. And EMH would gain access to more health care services, including the pediatric expertise of UH's Rainbow Babies & Children's Hospital.

On Thursday, health system leaders said the talks began last year as the smaller EMH searched for ways to meet the demands of federal health reform, including changes in the way hospitals will be paid.

Jeff Brausch, board chair for EMH’s parent company Comprehensive Healthcare of Ohio, “We felt that we just could not ramp up our size through partnering and collaborative efforts.”

University Hospitals Chief Executive Tom Zenty congratulated EMH for “having the foresight” to join with a larger health system.

The two systems will be able to reduce costs by consolidating supply chains and purchasing activity. In addition, EMH will have access to their teaching hospitals and some physicians may be interested in being employed at UH, Zenty said.

In June, consulting giant PriceWaterHouseCoopers released a report reviewing the increased number of hospital mergers in Massachusetts after that state implemented some of the mandates of federal reform early. The researchers found greater consolidation in that state was caused because smaller community hospitals did not have the profit margins to withstand the changing payment methods required under the reform.

Both UH and EMH are nonprofits and UH’s Zenty said it would take 90 to 120 days to review the smaller health system's financial details.

“Our discussions to date quite frankly have been about visioning and philosophy,” Zenty said. Merger talks are expected to wrap up by year's end.

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