Niagara County hospital joining Catholic Health

April 30, 2014 Updated Apr 30, 2014 at 7:34 AM EDT

By Tracey Drury, Buffalo Business First

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Niagara County hospital joining Catholic Health

April 30, 2014 Updated Apr 30, 2014 at 7:34 AM EDT

The merger of Mount St. Mary's Hospital and Rehabilitation Center into the Catholic Health System brings together two very similar organizations with common beliefs and missions.

The two organizations announced this week the Niagara County hospital would become a full member within Catholic Health, joining a system of sites in Erie County that includes Mercy Hospital in South Buffalo, Kenmore-Mercy Hospital and Sisters of Charity, which has hospital sites in Buffalo and in Cheektowaga at the St. Joseph's campus. Bertrand Chaffee Hospital in Springville is an affiliate member.

Mount St. Mary's also pursued a merger in the late 90s with Niagara Falls Memorial Medical Center, but the deal fell apart about 18 months later. State officials via the Berger Commission recommended the two hospitals try again a few years ago, but the two hospitals were unable to come to terms, said Judith Maness, CEO.

The merger with Catholic Health, on the other hand, followed the success of multiple collaborations and was a better fit given their common mission and beliefs, she said.

"The old axiom about culture eating strategy for lunch holds true," Maness said. "Culturally, from a heritage and mission and values perspective, I believe and I think my board is in total agreement, that Catholic Health is our best partner. We have very complementary service areas, we don't have a ton of overlap and I believe that makes this a very positive combination."

With revenue of $90 million, the Mount St. Mary's campus in Lewiston includes the hospital; and a 250-bed nursing home, Our Lady of Peace Nursing Home, a nonprofit that brings in another $22 million in revenue annually. The nursing home will remain independent and not join the Catholic Health system.

Catholic Health is a $940 million system created in 1998 when five hospitals joined under a common umbrella corporation. Early plans called for Mount St. Mary to be part of the system, but the timing wasn't right, said Joseph McDonald, CEO.

"That's always been on the plate, but we had to work through a lot of different issues," he said. "In the last four years specifically we've done literally dozens of specific projects to help improve Catholic Health and Mount St. Mary's so we can better serve the Niagara County region. I see it (the merger) as a logical progression. My view is that large, regional, clinically-integrated health systems are one of the more successful models in the nation to create sustainable health."

Mount St. Mary's and Catholic Health have long shared a religious institutional parent in Ascension Health, a national Catholic health ministry sponsored by the Daughters of Charity and Sisters of St. Joseph. Catholic Health is also a member of CHE Trinity Health and the Diocese of Buffalo.

Both sides insisted the move does not come in response to financial difficulties at either organization, though McDonald acknowledged every hospital is under some amount of financial uncertainty related to the Affordable Care Act and general health care economics. Maness said the coming together will make both more efficient and lead to lower costs for both the business and patients.

"We foresaw that needing to be part of a large, regional, clinically-integrated system was going to be important for now and into the future," she said. "Ascension has been encouraging all of its health ministries to look at the future and the way that health care reform is going to demand that we transform ourselves to create these regionally and clinically-integrated organizations."

Initially, there are no plans for lay offs or major structural changes, but Maness said it's too soon to know exactly what the final organization will look like. Mount St. Mary's employs about 700 full and part-time at the 175-bed hospital plus another 400 at the nursing home. They'll join 8,300 workers at Catholic Health. Maness plans to remain on board as president through the process, but acknowledged future administrative appointments would likely follow the existing model within Catholic Health.

The two organizations have been working together since 2012 under a collaborative services agreement. Additionally, Mount St. Mary's Hospital and its physicians are also members of Catholic Medical Partners, a clinically integrated physician network that also includes Catholic Health and its physicians.

Combined, the existing hospitals at Catholic Health with Mount St. Mary's and Bertrand Chaffee account for 1,185 acute-care beds in two counties.

Joining Catholic Health will give Mount St. Mary's access to all of its administrative and corporate services. Initial plans call for enhancing primary and ambulatory services, expanding home and community based services, improving operational efficiencies and hospital performance, and supporting physician recruitment to enhance care throughout Niagara County.

It will also help the hospital meet ongoing challenges taking place in healthcare both locally and nationally.

The deal comes as Catholic Health is working to complete a full-asset merger of its hospitals and other related corporations, which will create a nearly $1 billion institution.

Making Mount St. Mary's a full member of the system will require approvals from regulators at the State Department of Health. That process will follow corporate, religious and governmental approvals, all of which are expected to be completed by early 2015.

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