North-Shore Long Island Jewish Health System, the third-largest secular healthcare network in the country, yesterday announced its affiliation with Lenox Hill Hospital in New York, a 652-bed facility with 3,600 employees that is reportedly projecting a loss of between $10 million and $15 million this year.
For North Shore LIJ, which already has 15 hospitals and 5,000 beds, affiliation with Lenox Hill represents an opportunity to expand beyond Queens, Long Island, and Staten Island across the bridge into Manhattan for the first time.
"We're broadening our footprint," while benefitting from even greater economies of scale, says NS LIJ President and CEO Michael Dowling. He added that it was a natural affiliation, because Lenox Hill already draws patients from Queens.
For Lenox Hill, a 153-year-old stand-alone facility situated two blocks east of Central Park, Dowling says, the benefits are obvious. It has been financially disadvantaged in New York's extremely competitive healthcare market because it is a single facility not affiliated with any other healthcare system, as many hospitals now are.
Also, with changes coming to improve quality throughout the healthcare industry as well as those mandated by health reform legislation, Dowling says, hospitals like Lenox Hill need the strength to compete with larger organizational structures' bargaining clout.
"We're going to have to be more accountable for our outcomes. We're going to have to take care of patients throughout the continuum of illness, and manage populations of people rather than individuals," Dowling says.
"And you can't do any of this today unless you're part of a large system."
No layoffs are planned; however, Dowling says some staff will be lost through attrition over the next two years. One way the amalgamated system will save money is by extending North Shore LIJ's electronic medical record system to Lenox Hill, which has not yet made the investment, Dowling says.
Also important is the consolidation of basic back office functions throughout the 16-hospital system. "We don't have individual back office functions, like HR, finance, procurement, facilities construction, legal, planning and analysis," and many other departments, all of which will be run centrally throughout the system.
In this way, Dowling says, "we can achieve enormous efficiencies, although it will take us two years to get this all done."
All regulatory and board approvals have been obtained.
For now, physician staffs will remain mostly separate. Most of NS-LIJ's network of 8,000 doctors and Lenox Hill's 600 physicians will still practice at their respective hospitals.
NS-LIJ is the ninth-largest employer in New York City with 38,000 employees, including 9,500 nurses, and the largest on Long Island. It cares for more than 325,000 patients a year.
A spokesperson for Lenox Hill could not be reached for an interview, but Gladys George, president and chief executive officer of the hospital, said in a statement that "We are confident that our patients will benefit from North Shore-LIJ's nationally recognized quality initiatives, depth of clinical services, and new medical school being developed with Hofstra University."
North Shore LIJ says it expects to find out in June whether the new school meets preliminary accreditation standards, and if it does, expects to open in the summer of 2011.
According to a joint statement, Lenox Hill is described as ranking "among the nation's top hospitals in heart and heart surgery, digestive disorders, and neurology and neurosurgery" in U.S. News and World Report, and is recognized nationally for its orthopedic surgery, sports medicine, and maternal/child health lines of service.
It also has pioneered in off-pump heart bypass surgery, robotic cardiac surgery, and interventional treatment of carotid stenosis and aortic disease.
The announcement comes only two weeks after the closure of another New York landmark, 160-year-old St. Vincent's Hospital.