WCA Hospital has agreed to join the University of Pittsburgh Medical Center system in a deal that provides a major financial boost to the Jamestown hospital and gives the Pittsburgh-based network a significant foothold in southwestern New York.
The agreement, announced Thursday, calls for UPMC to invest $25 million over the next 10 years into WCA Hospital, to relieve the smaller hospital’s debts and to cover its pension obligations. Once the agreement closes next summer, as expected, WCA Hospital will change its name to UPMC Chautauqua at WCA.
WCA Hospital, founded in 1885, is licensed for 317 beds and had 1,180 employees as of the end of 2014.
WCA officials said they have spent the past five years exploring their options for continuing to provide the best care at a time when financial and regulatory pressures are rising on rural and small-city hospitals, driving many of them to seek affiliations or outright mergers with larger hospitals and systems.
WCA since 2012 has formally collaborated with UPMC Hamot in Erie, Pa.
The new agreement goes further in fully integrating WCA Hospital into the $12 billion UPMC delivery and finance system, which includes a nationally renowned academic medical center.
The financial assistance from UPMC will allow WCA to free up additional money from its budget for other priorities, according to the hospital’s statement. WCA earned $406,600 on $93.3 million in revenue in 2014, according to its most recent filing with the IRS.
More broadly, the affiliation with UPMC ensures a regionally coordinated approach to treatment and preserves high-quality local care for residents of Chautauqua County, WCA officials said.
“The integration will not only strengthen WCA as the foremost provider of health care in Jamestown and the surrounding region, but will provide even greater opportunity moving forward into our future to offer additional specialty services and programs to the benefit of the communities we serve,” Betsy T. Wright, WCA’s president and CEO, said in the statement.
The affiliation agreement is subject to a number of regulatory approvals, including receiving a certificate of need from the New York State Department of Health.