Two large nonprofit health-care systems, LHS Corp. and HealthWest Foundation, announced Friday that they have merged, creating an organization with $1.3 billion in annual revenue. The new group, called UniHealth America, will operate 10 hospitals--including Santa Monica Hospital and California Medical Center in downtown Los Angeles--and several other facilities, mostly in Southern California.
UniHealth will be more competitive and operate at a lower cost than Los Angeles-based LHS and Woodland Hills-based HealthWest could operate separately, UniHealth Chairman Samuel J. Tibbitts said in an interview. Much of the savings will come by cutting corporate staff.
In anticipation of the merger, LHS and HealthWest have laid off a total of 30 senior executives and 90 other managers in the past two months, for a projected saving of $11 million over the next 18 months, Tibbitts said. An undetermined number of further layoffs are expected, he said. "There'll be some more as we get further into such areas as finance and data processing."
Staffing at hospitals will not be affected in any way, nor will the quality of care change, Tibbitts added. But growing competition and deregulation in the hospital business is forcing even nonprofit chains to combine or sink, he said, comparing hospitals today to the airline and banking industry three or four years ago.