For the second time in three months, Bronx-based Montefiore Medical Center has announced it will buy a financially troubled suburban hospital. This time it is Sound Shore Health System, which operates two hospitals in New York.
Financially troubled Sound Shore Health System was thrown a lifeline last week when Montefiore Medical Center petitioned a federal bankruptcy court for permission to buy the two-hospital system. Terms of the deal were not disclosed.
Sound Shore Health System includes the 252-bed Sound Shore Medical Center of New Rochelle, and the 196-bed Mount Vernon Hospital. Montefiore said in a media release that it plans to keep open both hospitals and a skilled nursing facility. Sound Shore filed for Chapter 11 protection last week, just hours before Montefiore petitioned the court.
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"Providing ongoing jobs and supporting the local economy are important benefits of a vital healthcare system," Steven M. Safyer, MD, president/CEO of Montefiore Medical Center, said in a media release."We are making a long-term commitment to lower Westchester to support and improve the health of area residents as well as the health of the local economy."
John Spicer, president of Sound Shore, told WVOX in Westchester that Montefiore has agreed to invest "a minimum" of $60 million for renovations.
"(A) new patient care unit, a number of infrastructure improvements, meaning new boilers, new roofs. So they're committing a significant amount of resources to upgrade facilities—both at Mt. Vernon and Sound Shore," Spicer said. "We are going to go through a restructuring process and they're putting significant resources behind that, in the $60 million-plus range. So they're committing a lot of money."
Spicer told the radio station that Sound Shores physicians would warm to the plan as they learned the details. "The more they are finding out… and we've become a little more public with everything, the comfort level is increasing," Spicer said.
"Montefiore has said out loud that they are committed to the private practice of medicine and our voluntary attending physicians, Montefiore has a couple of mechanisms within their structure, meaning the Montefiore IPA – which is an Independent Practice Association – which helps doctors improve their rates with insurers. And I think more and more our physicians are very comfortable with the entire process."
With the promise that both hospitals would remain open, the deal appears to have the support of the heavily unionized workforce at Sound Shore. The combined new system will include about 8,500 unionized staff. "Patients in Mount Vernon and New Rochelle deserve access to hospitals where they live," said Jill Furillo, RN, executive director of the New York State Nurses Association, which represents nurses at Sound Shore.
"Montefiore has committed to keeping Mount Vernon and Sound Shore hospitals open for care. We look forward to working with Montefiore, patients, and community leaders to preserve and expand healthcare access in our communities."
Adam Powell, a healthcare economist, says he thinks the deal will be approved by a federal bankruptcy judge because the acquisition is a good fit.
"Montefiore Medical Center has a large unionized staff, and may have the competencies necessary to manage the many unionized employees at the former Sound Shore Health System. Secondly, Montefiore may have been willing to take this risk it is rumored to have received the hospitals for a fractional of the value of their physical assets," says Powell, president of the Boston-based consulting firm Payer+Provider Syndicate.
"The push towards value-based care may have also played a role. While the hospitals are not exactly overlapping, they are potential substitutes for people with access to a car. In the long-run, the combined health system may be able to push patients towards lower cost facilities within it to reduce costs. Some types of shared overhead may also be reducible in the long-run."
The deal marks the second time in three months that Bronx-based Montefiore has picked up a suburban hospital at bargain basement prices. In March Montefiore finalized its $15.3 million acquisition of Westchester Square Medical Center, a community hospital in the Bronx that had operated under bankruptcy court protection for nearly seven years.
Earlier this year nearby Westchester Medical Center announced that it had ended six months of negotiations to acquire Sound Shore, claiming in a media release at the time that "Sound Shore appears to have a dramatically different view than WMC about how to best balance resources between investment in improving the Sound Shore/Mount Vernon facilities and the obligations that the Sound Shore System has accumulated over the years."
Spicer assured WVOX that this time the deal with Montefiore would go through. "This deal is done," he said. "It's a merger of the two facilities but when the dust clears, we are a part of Montefiore. We will be part of the Montefiore Medical Center Health System and frankly, they're the lead character here."
In a media release announcing the deal last week, South Shore said the "transaction will not impact the day-to-day operation and our nationally recognized doctors, nurses and staff will continue to serve our patients and provide quality, uninterrupted healthcare. This transition will not change SSHS's status as a not-for-profit hospital system and we will continue to treat all patients regardless of their ability to pay. In the long term, we believe that this acquisition will ultimately strengthen SSHS, leading to growth and enabling us to better serve the southern Westchester communities."
Montefiore operates nine clinics in Westchester and provides specialty care in cardiology, neurology and women's health, such as obstetrics and gynecology, fertility and reproductive medicine, fetal medicine and reproductive genetics. The transaction is subject to regulatory approval and could be completed by the end of the year, Montefiore said.
Advocate Health Care (IL) Finalizes Sherman Health Acquisition
Advocate Health Care on Sunday finalized its acquisition of Elgin-based Sherman Health Systems, which will now be known as Advocate Sherman Hospital.
Based in Bolingbrook, Advocate is the largest health system in Illinois.
Sherman's six other facilities in the Fox Valley will also take the Advocate name. Full integration of the two systems is expected to take about two years, Advocate said in a media release.
During its search for a buyer Sherman met with more than a dozen potential partners and began the due diligence process with Advocate in October, 2012. The deal was approved by state regulators in May.
"From the inception of our partnership discussions, our respect for the Sherman team and their accomplishments and capabilities has only increased," Jim Skogsbergh, Advocate's president/CEO said in a media release. "We share numerous core values; including a commitment to health outcomes and patient safety and a commitment to the communities we are privileged to serve."
Advocate operates 10 acute care hospitals, Illinois' largest integrated children's network, five Level I trauma centers, two Level II trauma centers, the state's largest home healthcare company and more than affiliated 6,000 physicians. Sherman will add seven sites, including a skilled nursing and inpatient rehabilitation facility, approximately 2,200 associates and 600 physicians to the Advocate system.
Advocate said it will not assume liability for Sherman's outstanding debt.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.