Skip to main content

Business Roundup: Independent Hospitals Disappearing in OH

 |  By John Commins  
   July 08, 2013

University Hospitals announces its intent to acquire one of two of the last independent hospitals in northeast Ohio while consolidation continues in Massachusetts and New York City.

The number of independent hospitals in northeastern Ohio continues to dwindle with news that University Hospitals has signed a letter of intent to acquire Parma Community General Hospital.



Terrence G. Deis, president/CEO of Parma Hospital

"We went through a thorough process and we think we selected the very best partner," says Terrence G. Deis, president/CEO of Parma Hospital. "It was the right combination of commitment to us and the community, a quality footprint, and culture, so we feel pretty good about it. The medical staff maybe even more importantly feels good about it. There is a lot of work to be done between now and a definitive agreement but I feel a lot better about it than I felt I would have even a few months ago."

Healthcare analyst Allan Baumgarten says the UH/Parma deal comes just weeks after UH announced a similar merger with EMH Health in Elyria, which had left Parma as the largest hospital in Cuyahoga County that wasn't already part of UH or Cleveland Clinic.

"UH and Cleveland Clinic have established northeast Ohio as a two-system market and these deals further cement that," Baumgarten said in an email exchange. "Except that Catholic Health Partners (Cincinnati HQ but several hospitals in northern Ohio) has emerged as a possible third system in the region with its partnership with the Summa Hospitals and health plan in Akron."

Although he called Parma "fiercely independent," Deis says it became time to acknowledge the realities that independent hospitals face in a consolidating market.

"We have a shrinking demographic in Northeast Ohio and the competition has stepped up. We just weren't able to compete in that environment. In the last year especially it has been our feeling that it was really inevitable," he explains.

"We have a three-hospital collaborative and last month they announced that they are merging with UH. That left us as one of two of the last independent hospitals in the Northeast Ohio area. If that didn't reek of inevitability, then nothing did."

"For us, the sequester was a big deal. We are a large Medicare facility and a 2% reduction doesn't seem like a lot, but in a decent year 2% is our whole bottom line. It's tough to make that up. The job went from getting more difficult every month to more difficult every week to more difficult every day. The money was needed to attract and retain physicians and the more we were fighting to hang on, the more difficult that became because the first thing people want to know is where are you going to be in five years."

In a media release announcing the acquisition, UH said it would bring investments and new services as a major benefit to the agreement including expanding the presence of UH Rainbow Babies & Children's Hospital that provides neonatal care at Parma Hospital. UH Case Medical Center, an academic medical center, will provide clinical research, and new technology and other innovations.

"Parma Hospital is a vital anchor institution in the communities that they serve," Thomas F. Zenty III, UH's CEO said in a media release. "We are honored to have the opportunity to support and share in their mission to provide the highest quality patient-centered care and to join with them and their physicians in advancing the vision of value-driven, affordable care." 

Parma employs 2,000 people and has more than 500 physicians on its medical staff, for a service area that extends beyond its six founding cities of Parma, Parma Heights, Brooklyn, Brooklyn Heights, Seven Hills and North Royalton.  

UH employs 18,000 people and its health system includes 10 hospitals and 20 outpatient health centers.

Deis says he isn't sure what his role will be when the deal is finalized later this year or if he will stay on as part of the new hospital management. "That is not going to be my decision, but I would hope that would be the case," he says.

Still, the adjustment will take some getting used to. "Once you are at the top of the organization, whatever sized organization, it is a little bit tough to adjust to not being the last say in things," he says.

Other recent hospital consolidation announcements:

Winchester (MA) Hospital to Affiliate with Lahey Health

Winchester Hospital's board of directors has voted to pursue an affiliation with Lahey Health in a service area that includes northeastern Massachusetts and southern New Hampshire, the two hospitals announced.

"This is an exciting step forward," Kevin Smith, president/CEO of Winchester Hospital said in prepared remarks. "We believe that by joining Lahey Health, Winchester Hospital will be better positioned to continue to fulfill its mission of serving the health needs of our patients. An affiliation with Lahey Health will make Winchester Hospital an even more effective partner in maintaining and improving the health of the communities we serve."

Howard Grant, MD, president/CEO of Lahey Health, said the deal would bring together "two innovative organizations are aligning to create a comprehensive network of locally respected primary care physicians and nationally recognized specialists."

The announcement comes nearly one year after Winchester Hospital formed a steering committee to review potential partners. After completing the affiliation agreement, Winchester Hospital will join the Lahey Health Board of Trustees as part of a shared governance model. The Lahey Health Board of Trustees will have an equal number of representatives with full partnership from Winchester Hospital, the former Northeast Health System and Lahey Hospital & Medical Center Boards of Trustees.

The organization will continue to be called Lahey Health, and Grant will remain as president/CEO.

Winchester Hospital services the northwest suburban Boston region with 20 clinical locations in nine towns throughout northeastern Massachusetts. Winchester Hospital also provides an extensive range of outpatient services as well as integrated home care.

In 2012, Lahey Hospital & Medical Center affiliated with Beverly Hospital, Addison Gilbert Hospital and other Northeast Health System entities to form Lahey Health, a health system that provides a full continuum of integrated health services. Lahey Health includes Lahey Clinic Physician Group with practices in Burlington, Peabody and other locations throughout northeastern Massachusetts and southern New Hampshire; Lahey Health Senior Care and Lahey Health Behavioral Services as well as more than 30 primary care physician practices and multiple outpatient and satellite specialty care facilities.

NY Downtown Hospital Merges with NY-Presbyterian

New York Downtown Hospital has been acquired by New York Presbyterian, the two hospitals announced. Financial terms were not disclosed.

The 180-bed community hospital, now renamed NewYork-Presbyterian/Lower Manhattan Hospital, remains the only hospital south of 14th Street in Manhattan.

Steven J. Corwin, MD, the CEO of NY-Presbyterian said NY-Presbyterian/Lower Manhattan plays a critical role in the healthcare of the community. "As the only acute care hospital serving lower Manhattan, this campus is vital to meeting the healthcare needs of many populations," Corwin said in a media release. "We are working closely with the community, as well as with Weill Cornell Medical College and Weill Cornell physicians, to create a first-class campus that provides the highest quality, most compassionate care and service for patients and their families."

NY-Presbyterian/Lower Manhattan joins the five other campuses of NY-Presbyterian: NewYork-Presbyterian/Weill Cornell Medical Center, NewYork-Presbyterian/Columbia University Medical Center, NewYork-Presbyterian/Morgan Stanley Children's Hospital, NewYork-Presbyterian/The Allen Hospital and NewYork-Presbyterian Hospital/Westchester Division.

Illinois' Edward Hospital and Elmhurst Memorial Finalize Merger

Naperville, IL-based Edward Hospital & Health Services and Elmhurst (IL) Memorial Healthcare announced that they have finalized their merger and made new leadership appointments.

The merger creates one of the larger integrated health systems in the state comprised of three hospitals: Edward, Elmhurst Memorial and Linden Oaks at Edward, with revenues of about $1 billion and more than 50 outpatient locations across a service area of 1.7 million residents. The system employs nearly 7,700 and has more than 1,680 physicians on staff. System naming/branding will be determined and communicated in the coming months, the new system said in a media release.

"This is an historic day for residents of our communities because it brings together and strengthens important community-focused institutions with long histories of serving the western and southwestern suburbs," Pam Davis, CEO of the new system, said in prepared remarks.

"While Elmhurst Memorial and Edward are already nationally recognized for quality and patient satisfaction, our collaboration will lead to even higher quality, and improved services and efficiencies for our patients as we meet the challenges of healthcare reform."

The new system will work with Illinois Health Partners, which includes DuPage Medical Group and its more than 400 physicians and many independent physicians, to jointly manage the care of more than 100,000 HMO patients in the region.

In May, Mary Lou Mastro was named president/CEO of Elmhurst Memorial Healthcare effective July 1. Gina Sharp was promoted to president of Linden Oaks at Edward, replacing Mastro. Also, Chris Mollet was named system executive vice president/general counsel, and Vince Pryor, was named system executive vice president/CFO.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Tagged Under:


Get the latest on healthcare leadership in your inbox.