With Borders Irrelevant, New York Hospitals Seek Out-Of-State Partners
ByJosefa Velasquez Politico July 25, 2016
ALBANY — If you stand on a rooftop in Plattsburgh, you can see Vermont across Lake Champlain. So, for Stephens Mundy, president and CEO of Champlain Valley Physicians Hospital, it was only natural that the facility he leads would partner with the University of Vermont Health Network.
“We’ve been competitors for years and we sat down and said this doesn't make sense,” said Mundy, who is also theboard chairman of the Healthcare Association of New York State,a trade group that represents hospitals throughout New York. “The world is changing and our patients and our economic trends have spoken on this. It was a natural”
The state Department of Health approved an affiliation between CVPH Medical Center and Elizabethtown Community Hospital and Fletcher Allen Partners, the previous name for The University of Vermont Health Network, in January, 2013.
UVHM may have been the first out-of-state health system with a footprint in New York but it certainly won’t be the last. With state borders increasingly an arbitrary concept for patients, other out-of-state health care systems are looking to work in New York and health care systems within the state are branching out, setting up outposts in other states.
In June,the state’s public health and health planning council approvedthe University of Pittsburgh Medical Center Hamot to take over the Woman's Christian Association Hospital in Jamestown, a 317-bed facility in Chautauqua County along the New York-Pennsylvania border.
UPMC declined to comment for this story citing the ongoing formal review process.
Neighboring Kaleida Health and Catholic Health — two other large systems in the area — were unwilling or unable to move forward with WCA.
Betsy Wright, CEO of WCA, said last month that her hospital had been looking for a partner for several years, had engaged with the community and was relying on this partnership to move forward. The state Department of Health had awarded the hospital more than $26 million in capital funding contingent upon the affiliation being approved. UPMC promised to invest an additional $90 million.
“If this isn’t approved it would be devastating,” Wright said last month.
According to a person familiar with the regulatory process, the health council weighs whether there are in-state options to support a hospital that is in financial strain. If there’s no health system within New York that’s willing to help, hospital boards look at their options to see where their patients are traveling for care.
Similarly, it’s easier for residents of Plattsburgh to get tertiary care in Burlington, which is roughly an hour away, than to make the two-and-a-half-hour trip to Albany Medical Center.
Residents of Plattsburgh and the surrounding areas have been going across the lake to get care in Vermont for decades, said John Brumsted, president and CEO of UVHM.
“State lines are really just artificial barriers run by state government and regulators,” Mundy said. “The patient at the center of this doesn’t really care about that.”
While it makes sense for hospitals — some of which may be financially struggling and in rural areas — to look to other states for help, it’s a long and arduous process.
According to the New York Department of Health, when an out-of-state hospital system seeks to become an operator of a hospital within New York, the parent corporation must first obtain a Certificate of Need application.
The CON application requires the applicants to identify the proposed parent corporation’s board members, which may be composed of members from the out-of-state system as well as members from the New York-based hospital, and to describe the benefit of the parent corporation’s relationship to the New York hospital and the financial impact of the proposed parent corporation’s relationship on the New York hospital’s operations.
The Establishment CON would then undergo a full review by the planning council to determine of the character and competence of board members and financial feasibility.
And for health care systems that are based in other states, operating in another state adds a level of “complexity.”
“We live in both worlds,” said Brumsted. “It does add a degree of complexity. But we have the expertise that’s used to the regulatory environment and we have good legal counsel which knows the regulatory environment.”