NY health system plans to acquire two hospitals

NY health system plans to acquire two hospitals

by Lauren Dubinsky, Senior Reporter | June 27, 2014
Courtesy of North Shore-LIJ
Health System
North Shore-LIJ Health System — the largest health system in New York — is planning to acquire two Westchester County, NY hospitals. Last month, Phelps Memorial Hospital Center and this month, Northern Westchester Hospital approved letters of intent to explore joining the health system.

North Shore-LIJ has over 48,000 employees, 17 hospitals and more than 400 outpatient physician practices across Long Island, Queens, Staten Island and Manhattan.

"We are looking to expand our footprint into Westchester County," Terry Lynam, spokesman for North Shore-LIJ, told DOTmed News. "We're also looking at other areas and other communities that are outside of our traditional service areas."

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Phelps Memorial Hospital is a 238-bed community hospital with 1,600 employees. The hospital serves 8,000 inpatients and 325,000 outpatients annually. Northern Westchester Hospital has 189 beds and had 9,357 admissions and 141,372 outpatient visits in the last year, according to American Hospital Association data.

The hospitals have voiced their reasons for wanting to join the health system. "The primary objective of the Phelps Board of Directors in seeking partnership with an academic medical center has been to continue to provide the same, if not enhanced, quality services that our community has come to depend upon," Richard Sinni, chair of the Phelps board, said in a statement.

Northern Westchester Hospital has the same objective but it also has other goals in mind. They're very much focused on staying on the leading edge of technology, achieving greater operating efficiencies and reducing costs, Joel Seligman, president and CEO of the hospital, said in a statement.

Lynam said that the acquisitions will also provide both hospitals with a level of financial stability. "In this environment, very few hospitals across the country are stand-alone hospitals any longer," he said. "They're typically part of a larger network of hospitals that provide many opportunities for efficiency as well as opportunities for enhancing clinical care."

Lenox Hill Hospital in Manhattan joined the health system in 2010 for those reasons, but the wave of hospital mergers sweeping the nation in recent years is also due to changing reimbursement incentives and the pursuit to cut costs.

In April, the University of Wisconsin Health System announced its plans to merge with SwedishAmerican Health System in Illinois. In mid-March, Chicago-based Northwestern Memorial HealthCare and Cadence Health announced they were pursuing a merger. Also in March, Detroit-based Beaumont Health System, Oakwood Healthcare and Botsford Hospital announced plans for a three-way merger.

When asked about whether the hospitals will retain their Board of Directors, Lynam said he doesn't want to comment on the governance structure at this point, but he did mention that they have no intention of laying people off.

He said that he expects the negotiations to go on for another couple of months and by either late summer or early fall, they hope to move forward with a final agreement.

"The due diligence process, as it's called, is an opportunity for us to learn more about the hospital, try to better understand its operations, as well as its finances," he said.

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