Sunday, February 19, 2012

Hospital affiliations increasing: Auburn and Rochester recent example

Recent article on hospital affiliations:

The Auburn hospital, rebranded last week as Auburn Community Hospital, announced Jan. 25 it will explore pairing with the Rochester General Health System "to further enhance its 120-year tradition of providing compassionate, quality acute and long-term care services."

It chose Rochester General over three other suitors: the University of Rochester Medical Center and St. Joseph's and Upstate University hospitals in Syracuse. Crouse Hospital, also in Syracuse, was asked to submit a proposal but did not.

ACH said in a statement that it chose to continue talks with Rochester General because of its "successful track record of collaboration with smaller standalone hospitals, its reputation for innovation, a sterling record of patient safety and a national reputation for quality."

Neither ACH nor Rochester General would elaborate on those criteria, but the decision to seek a partner is part of a statewide trend among hospitals small and large, rural and urban.

William Van Slyke, a spokesman for the nonprofit advocacy group Healthcare Association of New York State, said reductions in Medicaid and Medicare reimbursement rates have cut into hospitals' margins at the same time that stricter performance measures demand greater accountability and better patient results.

"Really what's happening is the whole health care system is transitioning from a fee-for-service model to a coordinated care management system, where you're paid by an insurance company to provide care for a person," he said. "Definitely the squeeze is on. Hospitals across the state are having to find new ways and build new relationships to provide care."

One common way forward has been collaborations, from clinical affiliations to full mergers and purchases. Those discussions have taken place in every corner of the state, from New York City and the Albany area to central and western New York, Van Slyke said.

Rochester General already has a partnership with Newark-Wayne Community Hospital, a 120-bed facility in Wayne County. It also spent two years working with Auburn's neurology unit to attain Stroke Center designation, something AMH achieved last August.

In Syracuse, Upstate took over Community General Hospital last July, combining to create the largest hospital in the region.

Upstate also made a strong pitch to partner with ACH. Its CEO, John McCabe, said the majority of Cayuga County patients who can't be treated at ACH end up at Upstate, including many visits for cardiology, orthopedics, trauma and cancer services.

Upstate's offer included financial help in adding specialists, clinics and infrastructure and paying for a study to decide what sort of health care presence Auburn needs, now and in the future.

The Syracuse hospital put forward five possible business models, ranging from "franchising" as an affiliate to a full purchase, McCabe said.

ACH would not comment on why it chose Rochester General over the other offers, but McCabe said he believed Upstate lost out because he would not promise that Auburn could retain a traditional hospital in the future.

"Clearly other people who responded to the (request for proposals) said you can always have a hospital in Auburn and here's $10 million for capital improvements," he said. "(I was unwilling) to make an absolute commitment that nothing would change in Auburn. I think that's unrealistic with what's going around."

Part of the difficulty for small, rural hospitals like ACH has been attracting doctors in the most profitable sub-specialty practices. Without those lucrative services, they often struggle to generate enough revenue to reinvest in their practice and facilities.

"More and more in New York, people will be asking, 'What's the right configuration of services? What should be regional and what should be left local?'" he said. "I think it may be difficult for (ACH) to still be a full-service, 100-bed hospital.

"That doesn't mean there can't be a medical campus that takes care of the needs of the people of Auburn to a certain level. ... Rather than saying, 'Will there be a building that's a hospital as we know it today?,' people should say, 'What services do we need?'"

A spokeswoman for the University of Rochester Medical Center said that hospital's proposal to ACH "did not offer a capital investment but maintained local ownership and control." St. Joseph's declined to comment.

Van Slyke, of the Healthcare Association of New York State, speaking about hospital affiliations in general but not Auburn in particular, said it's important to be transparent and communicate clearly, and not to be afraid to change.

"More and more providers and hospitals, if they continue to operate under the old model, they won't be able to sustain," he said. "It's very natural for communities to want to hold onto their facilities as they know them. But if there's a transparent discussion centered around meeting community needs under this new era of decreased reimbursement, that will lead to a solution. ... We need to figure out how those services - in-patient beds, OB-GYNs, cancer services, pediatrics - can be sustained in whatever model is the most efficient and most likely to succeed into the future."

ACH and Rochester General plan to provide an update on their discussions at the end of May.

Staff writer Justin Murphy can be reached at 282-2237 or Follow him on Twitter at


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