St. John's will add two community hospitals to its family of facilities next month.

Aurora's city council and hospital board and South Barry County Hospital's board of directors, at their Sept. 26 and Oct. 1 meetings, respectively, gave the go-ahead for Aurora Community Hospital and South Barry County Hospital in Cassville to affiliate with and lease their facilities to St. John's Health System, effective Nov. 1.

"We've set the lease agreements up in consecutive five-year terms that are renewable for up to 50 years. We believe that this will be a very long-term relationship with these two hospitals," said St. John's Regional Vice President Gary Pulsipher, who serves as the liaison for St. Johns' regional hospitals  Breech Regional Medical Center in Lebanon, St. Francis Hospital in Mountain View and Carroll Regional Medical Center in Berryville, Ark.   and the health system. Pulsipher also serves as president of Breech. "We're going to incorporate the two hospitals into one operating company, similar to how the other hospitals, St. Francis, Carroll Regional and Breech are separate companies operating within St. John's Health System."

Pulsipher said the employees and the employee physicians of the two hospitals will become St. John's employees. At press time, the new company was not yet named.

"Both hospitals came to us independently to affiliate, and they did that within two months of each other about a year ago. We see this as an opportunity for us to improve our managed care position as well as enhance our physician services in the Lawrence/Barry County area," Pulsipher said.

Aurora Community, founded in 1959, is owned by the city of Aurora, employs about 240 and is licensed for 53 beds, according to Aurora Community Chief Executive Officer Don Buchanan. Pulsipher said the facility's average daily census is 20-25 patients. Aurora Community has a 24-hour emergency room and provides obstetrics, outpatient surgery, home health care and various clinics such as cardiology and podiatry services.

South Barry County, founded in 1946, has about 130 employees and is licensed for 18 beds, according to its CEO, Debbie Stubbs. Pulsipher said the county-owned facility's average daily census is 10-15 patients.

South Barry County also has a 24-hour ER, but does not provide obstetrics services. Stubbs said the facility's strength is its outpatient services, such as cardiac rehab and other therapies, as well as home health care, hospice and homemaker services.

She added South Barry County's affiliation with St. John's is a natural progression in the facility's longstanding relationship with St. John's.

"(In recent years), it's been a challenge for us to maintain a positive operating margin," Stubbs said. "We've always had a good relationship with St. John's  when we expanded in 1995, (St. John's Facilities Vice President) Bill Syler was a tremendous resource to us and the Continuing Education department has helped us with training our employees for several years. In fact, I can't think of anything we've asked for help with that St. John's hasn't delivered."

Buchanan and Stubbs said the employees at their facilities are excited about joining St. John's.

"Our employees have been aware of the pending affiliation, and are positive and excited about what it means for the hospital," Stubbs said. "This will make our organization stronger and will allow us to continue to update our equipment, services and eduction level of our staff." She added that South Barry County will save approximately $125,000 on supplies each year with St. Johns' buying power.

Buchanan said Aurora Community's affiliation with St. John's also came about as a result of operational losses at his facility, and that joining St. John's will allow Aurora Community to continue providing the level of basic health-care services to Lawrence County, as well as a substantial savings on supplies. He estimated Aurora Community's annual savings on supplies will exceed South Barry County's estimated savings of $125,000 per year.

Pulsipher said it is anticipated that with the savings, as well as the strengthening of managed care products in the area, the facilities will be able to reach a combined 2 percent operating margin.

"This opportunity will allow us to continue our mission with the financial backing and technology of a larger, state-of-the-art facility," Buchanan said.