by dave gymburch Sentinel staff writer

Utica-area hospitals Faxton St. Luke’s Healthcare and St. Elizabeth Medical Center are exploring a possible merger, officials announced today.

Their boards of directors each recently passed resolutions to "begin discussions on the feasibility and benefits of merging, or undertaking other transactions that would more closely link the two hospitals," the announcement said.

Officials anticipated the process would take 18 to 24 months. The two hospitals employ a total of nearly 4,900 employees and their operating budgets total more than $535 million.

Officials cited economic and regulatory burdens as factors in the merger

discussions.

"The economic and regulatory environments continue to make it difficult for hospitals to survive. During the past several years, hospitals, particularly in New York State, have been struggling with the changes in reimbursement, unfunded mandates and an increasingly challenging regulatory environment. I applaud both boards for having the vision and commitment to explore a merger in order to sustain the healthcare needs of our community," said Gregory McLean, board chairman for Faxton St. Luke’s Healthcare.

St. Elizabeth board chairman Norman I. Siegel added, "Consolidation and joint partnerships are not new for our area. Faxton Hospital and St. Luke’s Memorial consolidated their services in 2000. Both St. Elizabeth Medical Center and Faxton St. Luke’s Healthcare jointly own the Mohawk Valley Heart Institute and have collaborative agreements for the Regional Cancer Program and the Central New York Diabetes Education Program. As we, the board members, look at the future, we feel it is responsible and prudent to explore the possibility of a combined system."

Faxton St. Luke’s President/CEO Scott H. Perra said the hospitals have saved the community "millions of dollars in resources" by working together to "not duplicate services in a number of areas." But "as we look to the future and see the continued decrease in reimbursement and the additional burden placed on healthcare for regulatory reform, we recognize it is no longer business as usual," he said.

While the two hospitals are "going through this process" of exploring other healthcare delivery models, Perra said, "we are very sensitive to what this announcement means to our healthcare family and our community. We recognize there will be concern among our employees, medical staff and members of our community. They will be anxious to know what this means regarding their jobs, where physicians practice and where patients receive care. Our pledge is to keep an open dialogue throughout this process."

St. Elizabeth President/CEO Richard H. Ketcham said "we have no preconceived ideas about the final outcome or what the new system might look like." He noted a number of systems across the state that have merged, adding "we will be talking directly to a number of them in the coming months." He further mentioned "many avenues we need to explore, including working with the New York State Department of Health and our national, state and local government officials."

Ketcham also said "it is very important that the sponsor of our medical center, the Sisters of St. Francis, is fully involved as our discussions develop. I am pleased that they have already pledged their full support for our participation in this process."

Among comparative data listed:

¿ Number of beds — Faxton St. Luke’s, 370 acute care and 202 long term care; St. Elizabeth, 201 acute care.

¿ Employees — Faxton St. Luke’s, 2,950 including 2,650 full-time equivalents; St. Elizabeth, 1,950 including 1,750 full-time equivalents.

¿ Medical staff — Faxton St. Luke’s, 313 active; St. Elizabeth, 311 active.

¿ Emergency Department visits (2010) — Faxton St. Luke’s, 38,487; St. Elizabeth, 38,441.

¿ Urgent Care visits (2010) — Faxton St. Luke’s, 18,000.

¿ Admissions (2010) — Faxton St. Luke’s, 16,956; St. Elizabeth, 12,291.

¿ 2011 Operating budget — Faxton St. Luke’s, $333 million; St. Elizabeth, $205 million.

¿ Union representation — Faxton St. Luke’s: Communications Workers of America, New York State Teacher’s Union, Visiting Nurse Professional Guild; St. Elizabeth: New York State Nurses Association, United Food and Commercial Workers.

Officials at Rome Memorial Hospital could not be reached for a reaction to the announcement