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Kaleida Health to become parent of Upper Allegheny Health System

Kaleida Health will become the parent organization of Upper Allegheny Health System in a proposed affiliation agreement announced Tuesday.

Upper Allegheny Health System comprises Bradford Regional Medical Center and Olean General Hospital. Under terms of a letter of intent to affiliate, the two hospitals will become part of Kaleida while remaining separate legal entities with separate boards of directors.

Officials said in a statement that the letter of intent proposes no immediate changes at either hospital, including staffing, and employees of Bradford Regional and Olean General will remain employees of their respective hospitals.

Timothy J. Finan will remain president and CEO of Upper Allegheny and its member hospitals. Moreover, the names Upper Allegheny Health System, Bradford Regional Medical Center and Olean General Hospital will remain as they are.

“Approximately 65 percent of the nation’s hospitals are currently in multi-hospital system arrangements,” Brenda L. McGee, chairwoman of the Upper Allegheny board of directors, said in a statement.

While 186-bed Olean General and 107-bed Bradford Regional have experienced consecutive years of positive operating margins, officials said the outlook for rural hospitals remains a matter of significant concern. It is anticipated that the affiliation will provide more sound financial footing for the rural facilities, and help Kaleida by bringing in patients for specialty medical programs.

“Virtually every community hospital in southwestern New York and northwestern Pennsylvania is now affiliated with a major urban tertiary medical center,” McGee said.

“The affiliation with Kaleida Health is a strategic and proactive initiative that continues our efforts to secure and enhance health care for the Bradford and Olean communities well into the future. The retention of a separate UAHS board of directors will assure that our hospitals remain responsive to local healthcare needs.”

Ultimate responsibility for Upper Allegheny and its hospitals will reside with the Kaleida board, officials said.

For Upper Allegheny, the affiliation offers its patients more seamless access to Kaleida’s specialty services, such as the Gates Vascular Institute and Women & Children’s Hospital, as well as Erie County Medical Center, according to the hospital executives. ECMC and Kaleida operate under the parent organization known as Great Lakes Health.

“Together, we can continue to improve the health and wellness of the rural communities across the Southern Tier and Northwestern Pennsylvania,” Jody L. Lomeo, president and CEO of Kaleida, said in a statement.

Lomeo said the affiliation will allow for joint physician recruitment, telemedicine, clinical education, information technology enhancement and joint supply purchases.

Finan said the affiliation will put Bradford Regional and Olean General in a better position to attract and retain physicians and other staff, and provide a more stable employment outlook. Under terms of the letter of intent, Kaleida will fund building improvements for several new physicians to be recruited to Bradford and Olean.

This is not the first connection between the organizations. In 2013, Kaleida and Olean General established an interventional cardiac catheterization laboratory in Olean. Also in 2013, Kaleida and Bradford Regional established a home care agency, VNA of Northwestern Pennsylvania, in Bradford.

Kaleida also recently also reached affiliation agreements with hospitals in Dunkirk and Lockport.