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Three East End Hospitals Form and Alliance

Posted on 26 June 2008

The three East End hospitals last week rolled out a new agreement they have forged together crafted to bring a broader and more balanced menu of services to local residents, give them a stronger bargaining position and find economies that will make the three institutions more financially stable.

The East End Health Alliance comes about ten years after the three hospitals had formed the Peconic Health Corporation, an ill-fated agreement that, some say, was restrictive and hamstrung the institutions.

“It’s too cumbersome a structure if every decision has to be approved by everyone in the room,” said Southampton Hospital President and CEO Robert Chaloner. “Nothing gets done.”

The organization of the earlier agreement required that each of the three hospitals had to agree unanimously on a proposal in order for it to move forward, said Chaloner. And that is the biggest difference between the two organizations. The Alliance includes a board made up of 21 members, seven from each hospital, and a simple majority will get a proposal approved. A super-majority — a much higher percentage of aye votes — would still be required for certain major decisions, such as creating debt.

As designed, the board will have authority over long term and strategic planning, and will be responsible for approving each hospital’s budget. In addition they would implement and approve programs and approve affiliations and partnerships, such as one being developed with Stony Brook University Hospital.

Individual hospitals would still be responsible for day-to-day management of services and operations, fundraising and developing the budgets that would be approved by the Alliance board.

“I lived through the first alliance, and I think there is a whole new spirit,” said Southampton Hospital Vice Chairman Richard Hiegel at signing ceremonies for the new alliance at Martha Clara Vineyards in Riverhead on Friday. Hiegel said he believed the alliance would put an end to what he called “destructive competition,” and would allocate services between the three “in a reasonable way.”

“The board and staff are committed,” he promised. “There is no doubt we will succeed — we must succeed.”

The new alliance is largely the result of recommendations from the Berger Commission, a state constituted panel that was formed to look at health care in New York for the 21st century. The panel, which released its recommendations early last year, was charged with studying the needs and services of hospitals and nursing homes across the state to ensure they were appropriate to meeting community needs, as well as providing affordable and meaningful care with economies that would guarantee fiscal stability.

In some cases, the Berger Commission actually recommended the shutting of some facilities, said Chaloner. In the case of the East End hospitals, they were urged to work together.

“When we were told by the commission to work with fellow hospitals, I said ‘Sheeeesh, here we go again’,” said Jesse R. Goodale III, chairman of the Peconic Bay Medical Center (formerly Central Suffolk Hospital).

Goodale, who will serve as the Alliance’s second vice chair, said his own hospital was undergoing a major construction project at the time.

“I said ‘Keep your eye on the prize, and that’s the construction’,” Goodale related during Friday’s ceremony.

But Goodale was enthusiastic about the new arrangement.

“The construction is still the major prize, but it’s not the only prize,” he told the crowd. “The new goal is when I can say to someone, ‘Why don’t you visit our hospital,’ and take them to Southampton; or say ‘Why don’t you see what we’re doing,’ and bring them to Eastern Long Island.”

Southampton Hospital itself is confronting demands and pressures on its facility, and will now be subject to review by the East End Health Alliance for any major changes. It has explored possible sites for expansion or building a new facility, and while property owned by the Elks Lodge of Southampton on CR 39 has been targeted, Chaloner said they are still considering other options.

“We need to do something with the facility, that is accepted,” said Chaloner. “What goes into it is something we will have extensive discussions about. Also, what is the financial reality? And what is a good site?”

In all, the alliance will serve a population of about 300,000 people across eastern Long Island’s 300 square miles, and provide care to approximately 16,000 inpatients and 60,000 emergency room patients. And while each of the hospitals continue to have a mandate to offer services such as emergency rooms, operating rooms and a minimum number of in-patient beds, each hospital will also be developing their own specialties. Peconic Bay Medical Center will specialize in physical rehabilitation and Eastern Long Island Hospital in Greenport will expand their already significant psychological services. Southampton will continue to grow its women’s services and will begin phase two of their obstetrics and gynecology expansion, which will be regionally dominant.

“People ask why, if we’re going to move, would we still do this,” said Chaloner. “Any move is still five or six years away and a lot of babies are going to be born between now and then.”

 “All these services require great expense,” said Chaloner. And the creation of the Alliance brings with it a $14 million award from the state to further develop the specialties.

Part of the challenge all three hospitals face is the migration of patients to hospital and health facilities further west on Long Island and into New York City.

“Our agenda is to focus on needs and opportunities across the East End,” said Chaloner, who will serve as a board member for the new alliance. “Over the next two years we will do a fundamental analysis.” In particular, he said, they want to pursue the patients who are leaving for cancer and cardiac care.

 “When we went through the Berger process, we were told that we had created a model,” said State Senator Ken Lavalle at Friday’s ceremony, who acknowledged the process had been a difficult one. “Today we are bearing the fruits of tough decision making and putting in place a health care delivery system that will be the envy of the rest of the state.”

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