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ECMC plans new heart center despite restrictions by state

Erie County Medical Center announced plans Wednesday for a $91.7 million center for heart procedures, a proposal that appears to challenge a state order for the hospital to merge with Kaleida Health.

The plan to construct the new facility on ECMC's Grider Street campus requires state approval at a time when New York has put in place a freeze on non-essential ECMC and Kaleida Health projects as merger negotiations continue.

ECMC officials see an urgency to get such a facility built, saying the region needs improved heart care and risks missing out on state money that is soon to become available.

"We don't want to lose these monies to downstate while we're talking about 'new entities' up here," said Michael Young, president and chief executive officer.

At Kaleida Health, where the development came as a surprise, officials called the plan "completely irresponsible."

"Our organizations -- as well as the New York State Department of Health -- have been at the table for the past three months trying to design a new health care delivery model for this community," said Kaleida spokesman Michael Hughes. "This announcement thumbs the nose at that process."

The news, delivered in conjunction with ECMC's annual financial report, didn't sit well with the state, either.

"ECMC's unilateral proposal to build a heart and vascular facility on its Grider Street campus is premature and in direct conflict with the spirit of the ongoing discussions ECMC and Kaleida are required to conduct in compliance with the recommendations of the Berger Commission," said Health Commissioner Richard Daines.

The state's Commission on Health Care Facilities in the 21st Century -- also known as the Berger Commission -- made a Kaleida-ECMC reorganization a key recommendation that became law at the end of 2006.

It ordered the rivals to dissolve themselves and establish a new, combined organization that includes the University at Buffalo School of Medicine and Biomedical Sciences. It also called for the closing of Kaleida's Millard Fillmore Hospital, consolidation of duplicative services and construction of a new building for heart and vascular procedures.

If the competitors agree to consolidate by year's end, the state has signaled it will help fund the projects. If they don't agree, the state threatens to close ECMC or Kaleida Health's Buffalo General Hospital.

In addition to complex labor and legal issues, the consolidation proposal carries a huge price tag that has been estimated at hundreds of millions of dollars. There's no agreement yet on where services should be located. Moreover, hospital officials in Buffalo repeatedly have complained that it's difficult to plan a merger when they don't know how much money the state or others, such as the county, might provide.

"We don't know if we're working with $5 or $500 million," said Young.

ECMC displayed artists' renderings of an 85,000-square-foot addition with 56 private patient rooms and other facilities that would focus on the treatment of diseases from inside blood vessels.

Young, who said the project was in the works before the commission recommendations, cited the growing prevalence of heart disease and the hundreds of patients who seek treatment elsewhere because of perceived and real shortcomings at hospitals here.

Kaleida, by far, does the most heart procedures in the region. But physicians and others say there's still no program with the breadth of cardiac therapies, technology, research and training associated with the top U.S. heart centers.

The medical center, a type of public hospital called a public benefit corporation, would seek half the financing from the state and the other half from physician partners. The state is telling hospitals involved in potential restructurings to apply for competitive grants.

"If we don't put forward a plan for high-end cardiac care, we're going to lose the key state funding to do it," said Young. He said ECMC, if necessary, could finance the project itself with cash in hand and loans.

Young said ECMC still supports a merger, and he invited Kaleida and other hospitals to participate in the heart center project. But he expressed disappointment with the merger talks, saying they had yet to touch on patient-care issues, and impatience with the slow pace of change in Buffalo to update or replace its aging hospital buildings.

Kaleida's Hughes dismissed the need to rush, saying the state has yet to announce a timetable for applying for hospital restructuring grants.

Young made the announcement surrounded by representatives of his medical staff and public employee unions, all of whom endorsed the project. County Executive Joel A. Giambra also offered his support.

As for ECMC's finances, the hospital posted a $7.5 million profit in 2006, officials reported. The year-end result does not include the medical center's annual subsidy from Erie County, which was $17 million after the hospital returned $3 million of the $20 million it originally received, officials said.

The profit comes after losses of $18.1 million in 2005 and $28.4 million in 2004.

ECMC projects it will lose money this year, primarily because of a lower county subsidy -- $14 million -- and a change in how public entities must account for retiree health costs.

Young attributed the 2006 turnaround to increased revenues and better control over expenses. Admissions and emergency room visits appear to have gone up from 2005 to 2006 at ECMC, Kaleida Health and the Catholic Health System.

Hughes said Kaleida Health, which has about 31 percent of the local hospital market compared with ECMC's 8 percent, is reporting a $49.6 million surplus for 2006.

e-mail: hdavis@buffnews.com

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