Thursday, October 30, 2014

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Cortland/Ithaca

Hospitals plan affiliation

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UTICA, N.Y. -- St. Elizabeth Medical Center and Faxton-St. Luke's both say their hospitals are doing very well. In fact, business is booming.

"We have no beds. It's full. I want to emphasize that. We are not talking about closing a campus or anything like that," St. Elizabeth Medical Center President and CEO Richard Ketcham explained.

But they announced Thursday they do plan to team up.

"It seems to be there's a lot of duplications still in the community between our two providers and so we wanted to figure out, 'Is there a better way?'" Faxton-St. Luke's Hospital President and CEO Scott Perra said.

The presidents of both hospitals say they've reached an understanding with an affiliation.

Ketcham said, "We will have, again, a common board, common CEO, over time, common management, so it will look, in many ways, like one organization."

They say the reasons are largely economic. Perra said state and federal reimbursements keep shrinking, but regulations keep growing.

"But when the money, isn't there to help pay for that, there's a disconnect," he said.

They say eventually, they hope their purchasing power will be great enough to affect those regulations and bring other bigger services to their patients.

"We are about a $550 million business when we combine about 5,000 employees, so we think we can leverage purchasing power with our vendors of supplies and those sorts of things," Perra said.

Which means greater employee benefits, lower costs and hopefully better care as they put 5,000 heads together to problem solve.

"How can we maybe have, again, centers of excellence, where certain things are predominately done at one place or the other and then hopefully to grow services?" Ketcham asked.

"We have the inpatient acute rehab service St. Elizabeth doesn't have, they have the trauma service over here," Perra said, as an example.

But those are largely conversations the hospitals will be having with lawyers as they move forward with the affiliation. If all goes well, they will be one of the largest hospital organizations in the state within the next year or two.

The hospitals say they opted for an affiliation and not a merge because of St. Elizabeth's Catholic affiliation and restrictions, which St. Elizabeth Medical Center will keep.

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