Rural hospitals partner with larger health systems in struggle to stay open - The Buffalo News

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Rural hospitals partner with larger health systems in struggle to stay open

Dr. Anthony Bartholomew remembers several decades ago when Dunkirk’s Brooks Memorial Hospital was full, and patients spent days there for a host of conditions.

But that’s now history.

Better medications for chronic illnesses like heart disease reduced the need for hospitalizations. And doctors now perform many common procedures outside of hospitals, while complex operations get transferred to urban facilities better able to buy costly technology.

Today, on average, almost two-thirds of the 65 beds at Brooks sit empty, and the hospital is losing money.

“I can’t remember the last time I had an asthmatic in the hospital, and they used to be here all the time when I started,” said Bartholomew, an internist who heads Brooks’ medical staff.

For help, Brooks has reached out to UPMC Hamot, 50 miles away in Erie, Pa., an affiliate of the University of Pittsburgh Medical Center.

Brooks Hospital is far from alone.

Beset by fewer patients and rising costs, smaller and rural hospitals have been scrambling to stay alive.

Some are turning to larger health systems for project funding or the financial backing to borrow money. Others want help recruiting physicians or providing specialty services. Still others need expertise in management and information technology.

“Every one of the small, rural hospitals is talking to somebody, because they have to,” said Kenneth L. Oakley, chief executive officer of the Western New York Rural Area Health Education Center.

The result is a surge of mergers, affiliations and other collaborations:

• United Memorial Medical Center in Batavia earlier this year announced it is merging with the Rochester General Health System, a move intended to preserve access to a full range of medical services in Genesee County and to assure the hospital’s financial stability.

• WCA Hospital in Jamestown and UPMC Hamot signed an affiliation agreement in 2012 to help recruit doctors and provide specialty services, particularly heart care.

•Bertrand Chaffee Hospital in Springville in 2011 affiliated with Catholic Health, an arrangement that leases a cardiologist to the smaller facility three days a week.

•Jones Memorial Hospital in Wellsville in 2012 announced a collaboration with the University of Rochester Medical Center that was expanded last year with new neurology and cardiology services.

•Wyoming County Community Health System in Warsaw, also in 2012, partnered with the University of Rochester hospital to help provide services.

•Mount St. Mary’s Hospital in Lewiston last month announced a plan to affiliate with Catholic Health, giving it access to administrative and corporate services and specialty medical services.

The increasing cost and complexity of specialty care, as well as rapid changes in medicine, accelerate the trend. Hospitals face more pressure from the government and insurers to coordinate care, adopt electronic medical records and accept payment based on quality and cost-control measures.

Large employers

Nationwide, although 17 percent of the population lived in rural areas in 2010, only 12 percent of hospitalizations and 6 percent of inpatient procedures were provided in rural hospitals, according to a report in April by the National Center for Health Statistics.

Rural hospitals often serve as the sole acute-care facility in their communities, as well as one of the largest employers. So the elimination of key services or closure can leave patients and employees in crisis. It’s not easy to figure out what local services make sense financially and medically to avoid forcing patients to travel far for routine treatments.

“Gone are the days when the individual hospital could be everything to a single community,” said Dr. John Fudyma, chief of the division of general internal medicine in the University at Buffalo’s School of Medicine and Biomedical Sciences. He served three years as medical director with the Seneca Nation of Indians.

Risks and rewards

For rural hospitals, the decision to partner poses risks. It may mean no longer being full-service or giving up independence.

Yet the arrangements also offer rewards. Officials with United Memorial Medical Center talked to Kaleida Health, Catholic Health, University of Rochester Medical Center and Rochester General Hospital before deciding to merge with Rochester General. The 131-bed hospital will keep its name and its own governing board.

United Memorial chose a formal affiliation because the hospitals had collaborated in cardiology, pathology and urology since 2008 and recently opened a cancer and infusion center in Batavia.

Gina Ligonde is grateful for the arrangement. It means she received the best possible treatment for her breast cancer at a hospital that’s five minutes from her Batavia home.

Ligonde sees Dr. Julia Smith, her medical oncologist, at United Memorial and had received chemotherapy there every three weeks. For the single mother of a 2-year-old, that convenience made it less likely that she would miss an appointment.

“That was my major concern, having to commute back and forth,” Ligonde said. “If I had to go to Rochester General for every little thing – forget about it.”

At Wyoming County Community Health, many residents donated to a recent $31 million renovation, demonstrating how much small hospitals can mean to their communities. Yet the 62-bed hospital still faces financial and recruitment difficulties.

Executives there talked to hospital systems in Erie and Monroe counties before deciding 1½ years ago to collaborate with the University of Rochester Medical Center, an effort that is bearing fruit, said Donald Eichenauer, the hospital’s chief executive.

“It’s a less formal relationship. It’s kind of an agreement that we will work together to the best that we can. They look for ways to help us; we look for ways to help them,” he said.

For example, University of Rochester physicians fill 25 percent of the shifts in the hospital’s emergency department.

More collaboration

Larger health systems look for something in return, including patient referrals for complex care and expansion of their brand name.

“The path forward in health care requires collaboration,” said Roger Duryea, vice president of planning and business development at Catholic Health.

Bertrand Chaffee affiliated with Catholic Health in 2011, a relationship that allowed the hospital to open a heart center, with the Catholic system recruiting a cardiologist to staff it.

“Prior to that, people would have to travel to the metro area for routine cardiology and cardiac care,” said Nils Gunnersen, chief executive.

The arrangement followed Bertrand Chaffee’s emergence from Chapter 11 bankruptcy and settlement of more than $15 million in debt. The Springville hospital’s position has improved, though it’s still battered by the same financial pressures facing other facilities.

The region’s other major hospitals, Kaleida Health and Erie County Medical Center, have seen UPMC Hamot and the Rochester hospitals make inroads into Western New York.

“It is concerning and a challenge for us,” said Thomas Quatroche, senior vice president of marketing, planning and business development at ECMC, an affiliate with Kaleida Health in the Great Lakes Health System.

Quatroche said Great Lakes has been focused on investing in its own hospitals. “We’re going through a period of reorganization and will be in a better position to respond. We have to be ready to communicate the strengths of our organizations if some of these smaller hospitals want to reconsider,” he said.

Only a few smaller hospitals in the area have avoided mergers or formal affiliations.

In a joint venture, Olean General Hospital last year opened a cardiac catheterization lab with Kaleida Health, bringing less-invasive heart procedures to the Southern Tier.

Olean General came together with Bradford Regional Medical Center in 2009 to form the Upper Allegheny Health System. The system’s chief executive, Timothy Finan, questions whether the mergers and affiliations will solve the problems of rural health care, especially when rural facilities negotiate from positions of weakness.

“People in rural areas think that larger institutions have a back bench of extra doctors to dispense, and the larger institutions see us as a panacea for their ills,” he said. “But if you look at the history of these deals, the larger institutions rarely put skin in the game.”

In the northern part of the region, Eastern Niagara Health System remains unaffiliated, but elected officials worry about plans to shutter a site in Newfane.

Newfane Supervisor Timothy R. Horanburg said Eastern Niagara has shifted resources from 63-bed Newfane to a 134-bed Lockport site and in recent months has cut jobs and services.

“We’re not far from being closed,” said Horanburg, who with neighboring supervisors organized a rally March 22 to highlight community support for the facility.

The hospital is studying a variety of options to reduce expenses but has made no decisions, spokeswoman Carolyn Moore said in a statement.

Trouble in Dunkirk

Back in Dunkirk, the future of Brooks Memorial remains uncertain.

Brooks partnered with the TLC Health Network in Irving in 2008 to form the Lake Erie Regional Health System, but officials say the system fell short in efforts to become more efficient. In trouble, Lake Erie Regional in 2012 signed an administrative services agreement with UPMC Hamot.

But that wasn’t enough to help TLC, which in October asked the state Health Department for permission to close its Lake Shore Health Center in Irving and in December filed for Chapter 11 bankruptcy protection.

TLC lost more than $9 million in 2013 and had received $6.1 million in loans from Brooks Memorial investment reserves, of which only $1.6 million has been repaid. Now, Brooks is anticipating a $3.1 million deficit in 2014 and is examining how – not whether – it will significantly alter services.

“We need a reset here,” said J. Gary Rhodes, a UPMC executive who was named Brooks’ interim chief last year. “The survival of the hospital is not at stake, but it needs to be redefined.”

He sees Brooks maintaining emergency care and inpatient beds, and beefing up maternity services. Beyond that, he said, hard decisions will have to be made about what services should remain local, as well as what potential new programs may help boost business, such as urgent care or wellness.

“We will probably end up not being all things to all people. We may not even be a hospital in the traditional sense,” he said.

To Bartholomew, the internist at Brooks, the problems have forced an overdue examination. What physicians want, he said, is assurance that Brooks will stay competitive in technology and quality for those services that it keeps.

If the turnaround succeeds, Rhodes said he’s hopeful the hospital can avoid layoffs among its 400 employees. But he sees no chance for Brooks to remain as it is.

Survival guide: Smaller hospitals reach out to larger facilities for help

Bertrand Chaffee

Location: Springville

Partner: Catholic Health

Benefit: Cardiologist available at smaller facility.

United Memorial Medical Center

Location: Batavia

Partner: Rochester General Hospital

Benefit: Preserves full range of medical services in Genesee County.

Wyoming County Community Hospital

Location: Warsaw

Partner: University of Rochester Medical Center

Benefit: Helps provide emergency and other specialty services.

Mount St. Mary’s Hospital

Location: Lewiston

Partner: Catholic Health

Benefit: Gets access to hospital system’s administrative and specialty medical services.

Brooks Memorial Hospital

Location: Dunkirk

Partner: University of Pittsburgh Medical Center at Hamot, Erie, Pa.

Benefit: Gets management assistance.

Jones Memorial Hospital

Location: Wellsville

Partner: University of Rochester Medical Center

Benefit: Helps smaller hospital provide services like neurology and cardiology.

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