Ornda Healthcorp. to Take Over Summit : Medicine: $375-million merger with Burbank company would create one of U.S.’s largest publicly owned hospital firms.

The merger frenzy in the hospital industry continued Thursday when Burbank-based Summit Health Ltd. agreed to be acquired by Ornda HealthCorp. in a $375-million deal that would create a $1.6-billion hospital company and a significant force in the Los Angeles health-care market.

The deal would create one of the nation’s largest publicly owned hospital companies, with 46 acute-care hospitals, four retirement centers and more than 20 other facilities providing psychiatric and nursing care and outpatient surgery. The company, to operate under the Ornda name, would have 13 hospitals in the Los Angeles area. Hospitals throughout the country have been consolidating in response to President Clinton’s health care reform proposals, the growth of managed-care health insurance and a sharp decline in occupancy rates.

“Health care reform is really pushing providers into forming integrated delivery systems” or alliances between hospitals, physicians and other suppliers aimed at reducing costs and improving patient care, said Charles Martin, Ornda’s chairman and chief executive, who will retain those titles with the merged company.

The deal comes only weeks after Ornda, based in Nashville, announced plans to merge with American Healthcare Management Inc., a King of Prussia, Pa., hospital chain. Martin noted that each of the three merging companies own hospitals in Los Angeles and Orange counties, some of which now compete with each other.

“Now, with 13 hospitals we have better economies of scale for securing managed care contracts,” Martin said.

Ronald D. Spoltore, director of health care for consultant Kenneth Leventhal & Co. in Los Angeles, said Ornda will likely close or convert one or more of its Southland hospitals or convert them to specialty uses.

Under terms of the deal, Summit shareholders will receive $5.50 in cash and .2157 share of Ornda stock for each Summit share they own. Based on Wednesday’s $12.75 closing price of Ornda stock, Summit shares are valued at $8.25 a piece, for a total of $292 million.