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B. IHC Health Services, Inc.
In 1983, IHC transferred its hospitals and substantially all
its remaining operating assets, together with substantially all
its outstanding tax-exempt debt and other liabilities, to IHC
Health Services, Inc. (Health Services), a newly formed nonprofit
affiliate. As a result of this reorganization, IHC ceased to
operate hospitals and assumed the position of a parent company
overseeing the operations of several nonprofit and for profit
affiliates. IHC was Health Services’ sole member.
Health Services was IHC’s principal health care delivery
organization. During 1994, Health Services began to conduct its
activities through two divisions, the hospital division and the
physician division, which are described in detail below.
1. The Hospital Division
As of December 31, 1999, the hospital division comprised 22
hospitals (including 2,644 licensed beds) located in Utah and
Idaho. All of Health Services’ hospitals, with the exception of
Primary Children’s Medical Center (Primary Children’s) and McKay-
Dee Institute for Behavioral Medicine (McKay-Dee Institute), were
general acute care hospitals that provided inpatient and
outpatient services, and varying levels of emergency, ancillary,
and specialized services.
Primary Children’s specialized in pediatric care in the
Intermountain West (defined generally as the area covering
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