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State approves Kaleida Health, Upper Allegheny affiliation

An affiliation between Kaleida Health and Upper Allegheny Health System has cleared one of its last hurdles with an approval Thursday by the state Public Health and Health Planning Council.

Under their agreement, Kaleida Health will act as the parent organization of Upper Allegheny, which comprises 107-bed Bradford Regional Medical Center in Pennsylvania and 186-bed Olean General Hospital, as well as medical offices.

The affiliation is also under review by the Pennsylvania Department of Health.

The organizations signed a letter of intent to affiliate in 2016 in which the two hospitals will become part of Kaleida Health while remaining separate legal entities with separate boards of directors. The agreement proposed no immediate changes at either hospital, including staffing, and employees of Bradford Regional and Olean General will remain employees of their respective hospitals.

The organizations have a history of working together. In 2013, Kaleida Health and Olean General jointly established an interventional cardiac catheterization laboratory in Olean. Also in 2013, Kaleida Health and Bradford Regional jointly established a home care agency, the VNA of Northwestern Pennsylvania in Bradford.

Olean General and the Bradford Regional formed the Upper Allegheny Health System in 2009.

Smaller independent and rural hospitals have been affiliating with larger organizations across the country in a bid to remain financially viable and keep up with complex changes in health care. Among other things, they are seeking help with new payment models, recruitment of physicians, access to specialty services, information technology and quality initiatives.

“Beyond approval by the Pennsylvania Department of Health there are filings with the Federal Trade Commission to be approved,” Timothy J. Finan, president and chief executive officer of Upper Allegheny Health System, said in a statement.

He said he anticipates the approval process will be completed later this spring.

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