In this day and age, more and more Catholic health-care facilities face the immense challenge of protecting their ethical principles while seeking nonsectarian partners to maintain operational stability.
“You’re simply not going to see single-standing hospitals,” said Sister Marie Castagnaro, SSJ, president and CEO of St. Joseph’s Hospital in Elmira. However, she said, “Putting organizations together, even in the best of times, is difficult. It’s complicated and complex to form an integrated delivery network.”
Sister Castagnaro speaks from considerable recent experience. St. Joseph’s announced this past Nov. 17 its intent to join Guthrie Healthcare System of Sayre, Pa., which would commit $54 million to St. Joseph’s while allowing the Elmira hospital to maintain its adherence to Catholic ethical and religious directives. But just days after that announcement, New York state’s Commission on Health Care Facilities in the 21st Century instead ordered St. Joseph’s to begin supervised merger discussions with Elmira’s Arnot Ogden Medical Center.
While officials at Arnot Ogden expressed eagerness to talk with St. Joseph’s, St. Joseph’s recently brought a lawsuit in an effort to block the state mandate. The suit was thrown out in early January, but Sister Castagnaro said St. Joseph’s is still consulting with attorneys and might retry the case.
Several other Catholic health-care institutions in New York likewise face potential mergers with nonsectarian entities at the behest of the state panel, also known as the Berger Commission. Its sweeping consolidation plan, which became law Jan. 1, calls for the closing of nine hospitals statewide, as well as the elimination of 4,100 hospital and 3,100 nursing-home beds.
Albany Bishop Howard J. Hubbard lauded the Berger Commission for objectively weighing such criteria as “service to vulnerable populations, availability of services, quality of care, utilization, financial viability and economic impact.” But he charged that the commission failed to take into account such priorities as respect for human life in all its phases and a preferential option for the poor.
“We are concerned that this is a fundamental element of care that was not mentioned, or even alluded to in the criteria,” Bishop Hubbard said in testimony Dec. 1 before the state’s Senate Health Committee. Catholic hospitals “cannot compromise our values nor can we permit undue dictates from any governmental entity to jeopardize our religiously rooted identity,” he added.
Commission faults pact
St. Joseph’s affiliation agreement with Guthrie was three years in the making. The pact would help St. Joseph’s, an independent hospital, erase debt Sister Castagnaro said currently stands at $29 million. The debt arose, in large part, from St. Joseph’s emphasis on providing care to uninsured and underinsured patients.
“We take all comers,” Sister Castagnaro said. “You need a business partner that not only understands that, but lives it.”
An affiliation with Guthrie also would bring a wider range of services for patients, she said.
“We share the same vision of providing patients with the advantages of an integrated health-care delivery system,” agreed Mark Stensager, Guthrie president and CEO.
Guthrie’s current member organizations are Corning Hospital in Corning; Robert Packer Hospital in Sayre; Troy Community Hospital in Troy, Pa.; as well as long-term care facilities in New York and Pennsylvania. Denis Sweeney, spokesman for St. Joseph’s, said Guthrie would be acquiring St. Joseph’s, but not buying it. Although Guthrie would assume ultimate control, he said, St. Joseph’s would continue to operate under its own board and administrators.
St. Joseph’s had originally hoped to receive state approval of its agreement with Guthrie by late January, but the Berger Commission’s report, released Nov. 28, recommended that the agreement be shelved until talks between St. Joseph’s and Arnot Ogden have taken place.
“St. Joseph’s pursuit of a relationship with the Guthrie Health System will not serve the best interests of the Elmira community,” the report stated, adding that any approval should be withheld until discussions have been held between St. Joseph’s and Arnot Ogden “except where such approval or consent is necessary to protect the life, health, safety and welfare of facility patients, residents or staff.”
If either St. Joseph’s or Arnot Ogden fails to participate in such talks in good faith, that facility would be closed and the other expanded, the commission ordered.
“Further collaboration between Guthrie and St. Joseph’s will not fulfill the need for a single hospital in Elmira with common governance and management,” the Berger report continued. “Integration of Arnot Ogden and St. Joseph’s would reduce the duplication of services across the two facilities (e.g. emergency departments, medical/surgical beds, operating rooms), reduce administrative inefficiencies, limit the medical arms race between the facilities, and ensure the continuation of health care availability in the area.”
Stensager and Sister Castagnaro said they were surprised by the recommendation, since they had been apprising the commission of the talks between St. Joseph and Guthrie and hadn’t been told to discontinue them. St. Joseph’s December lawsuit sought to overturn the recommendation on the grounds that the commission had violated the state Open Meetings Law by meeting privately to reach its conclusions. But in a Jan. 4 ruling, State Supreme Court Judge Robert Mulvey dismissed the suit, stating that the recommendation “did not have any status or effect as a matter of law when it was issued.” All recommendations of the Berger Commission automatically became law when the state Legislature opted not to reject them by a Dec. 31 deadline.
The commission, comprising 18 statewide members as well as 36 regional representatives (six from each region), was created by former Gov. George Pataki and the state Legislature. As of early February, new Gov. Eliot Spitzer had yet to appoint a health commissioner, so officials at St. Joseph’s, Guthrie and Arnot Ogden said they don’t yet know when the recommendations will be revisited or enacted.
According to Sweeney, St. Joseph’s and Arnot Ogden previously discussed partnership possibilities in 1987, 1995, 1996 and 2002 without reaching an agreement.
Sister Castagnaro said those negotiations failed in large part due to disagreement about adherence to the Ethical and Religious Directives for Catholic Health Care Services, a set of 72 guidelines issued in 2001 by the U.S. Conference of Catholic Bishops. The directives address six areas: social responsibility; pastoral and spiritual responsibility; professional-patient relationships; care for the beginning of life; care for the dying; and forming new partnerships with health-care organizations and providers.
“They’re the lifeblood of what a Catholic hospital is all about,” Sister Castagnaro said, adding that Guthrie is more supportive of compliance with the directives than Arnot Ogden was in prior merger talks.
Anthony Cooper, president and CEO of Arnot Ogden, said his medical center already complies with 69 of the 72 directives, but acknowledged that it does diverge from the Catholic directives on the beginning of life.
Cooper and Dr. S. Jan Eberhard, chair of the Arnot Ogden board, said their hospital provides abortions, contraceptives and sterilizations. Although these treatments violate three of the Catholic directives, Cooper noted that they are permitted by civil law.
Guthrie, meanwhile, offers contraceptives and sterilizations but not abortions, according to Stensager.
“Historically, the central issue for St. Joseph’s has been abortion. Guthrie hospitals do not perform abortions,” he said.
Jack Balinsky, diocesan health-care coordinator and director of diocesan Catholic Charities, said a Catholic hospital may align with a nonsectarian entity that doesn’t follow all Catholic ethics and directives — so long as those practices aren’t forced upon the Catholic institution.
In talks between Guthrie and St. Joseph’s, Balinsky, along with Father Daniel Condon, diocesan chancellor, represented Bishop Matthew H. Clark, who approved the final arrangement.
“We (the diocese) don’t control (St. Joseph’s) directly, but must ensure a Catholic entity is conforming with Catholic mission,” Balinsky said.
Both Stensager and Cooper asserted that their intent would be for St. Joseph’s to continue its Catholic mission in full.
Where to from here?
In addition to ethical concerns, Don Hartman, chair of St. Joseph’s board of directors, contended that Arnot Ogden carries as much debt as St. Joseph’s does, so cannot offer the financial advantage afforded by affiliation with Guthrie. Cooper acknowledged that “we’re in the $30 million debt range ourselves,” but “when you take our assets and subtract our liabilities, you come up with a net of $130 million.” He also said that the state has made funds available to assist hospitals in closing and affiliating.
Repercussions from previously unsuccessful talks may still linger; however, Cooper and Eberhard said Arnot Ogden would like to start fresh exploring a merger agreement with St. Joseph’s.
“When you fail once, certain misperceptions develop on both sides of the equation. The longer time elapses, they can become larger than life,” Eberhard said, calling the Berger recommendation a chance “to forget about the past. It’s an even playing field, and perhaps we can move forward.”
Cooper said Arnot Ogden is not concerned about its own viability should the St. Joseph’s-Guthrie agreement be approved, but “my concern is that it blows a golden opportunity to do something for our community.” Eberhard added that many Elmira-area physicians have hoped for a St. Joseph’s-Arnot Ogden merger for the past 20 years and “are mystified by the logic of joining two institutions that are 20 miles apart in two separate states” when the same services could be provided by merging the two Elmira hospitals.
Mary LaRowe, who began Jan. 1 as CEO of St. James Mercy Health System in Hornell, can readily relate to the struggles in Elmira. In the 1990s she served as senior vice president of Batavia’s Genesee Memorial Hospital and participated in talks leading to a 2000 merger with St. Jerome Hospital, also in Batavia, to form United Memorial Medical Center.
She said beginning-of-life issues were a point of contention “right up until the final moment,” and that such a process requires much more follow-through than what the Berger Commission report has offered up to this point.
“The job of selling it to the community and showing the benefits takes time, effort and talent. Just having a group coming down saying, ‘These two need to get together,’ to me, is a very daunting task,” LaRowe said.
EDITORS’ NOTE: To view the state Commission on Health Care Facilities in the 21st Century recommendations, visit www.nyhealthcarecommission.org. To view the Ethical and Religious Directives for Catholic Health Care Services, visit www.usccb.org/bishops/directives.shtml.
Ethics remain large priority elsewhere
Just a decade ago, the Diocese of Rochester was home to three freestanding Catholic hospitals. Now, if St. Joseph’s Hospital in Elmira unites with either Guthrie Healthcare System of Sayre, Pa., or Elmira’s Arnot Ogden Medical Center, Hornell’s St. James Mercy Healthcare would become the only Catholic hospital in the diocese not affiliated with a nonsectarian institution.
And even St. James Mercy is no longer completely freestanding, having been aligned since 1997 with Catholic Health East, a coalition of Catholic health-care institutions operating in 11 states. Father Daniel Callahan, St. James Mercy’s vice president of mission services, said this association has helped St. James Mercy remain solvent.
“You’re really able to borrow from a host of other options offered throughout the system,” said Father Callahan, a Franciscan Friar of the Atonement.
Father Callahan noted that St. James Mercy is designated as a sole community provider, allowing it to collect higher Medicare payments as reimbursements from the government because it’s the sole source of inpatient care in its community. That’s been the case since Bethesda Hospital in Hornell closed in 1985; St. James Mercy subsequently acquired Bethesda’s property.
Although St. James Mercy is an unlikely candidate for a merger, Father Callahan anticipates increased sharing of services with nonsectarian agencies in the upcoming years — so it’s important for entities such as St. James Mercy to continue emphasizing Catholic ethical and religious directives.
“Where someone decides to receive care that would not be allowed in a Catholic hospital, that is something their physician is going to have to be dealing with,” he said.
St. James Mercy is sponsored by the Rochester Sisters of Mercy. Until 1999, the former St. Mary’s Hospital in Rochester was sponsored by the Daughters of Charity, who founded it in 1857. The order’s sponsorship of St. Mary’s ceased two years after St. Mary’s merged in 1997 with Greece’s Park Ridge Hospital (now Unity Hospital) to form Unity Health System.
The Catholic roots of St. Mary’s have held up through the merger, according to Stewart Putnam, Unity’s executive vice president and chief operating officer, who served as CEO of St. Mary’s when affiliation talks with Park Ridge began.
“We were willing to integrate to a very significant degree two physical plants,” Putnam said.
The former hospital is now called Unity St. Mary’s Campus. Putnam noted that Unity has greatly improved utilization of St. Mary’s space “by tailoring campus services to the specific needs of the neighborhood, while moving under-utilized hospital-based (services) to the Park Ridge campus.” Yet by retaining its inner-city location, the St. Mary’s Campus has continued its mission to the poor. He added that Unity is solvent, whereas St. Mary’s Hospital was losing $2 million per month in the late 1990s.
Putnam added that the merger was helped along significantly by the fact that St. Mary’s and Park Ridge had similar ethical underpinnings.
“Park Ridge had a pre-existing policy that did not allow sterilizations or abortions,” he said, adding that this remains the case even though no Catholic entity is any longer involved in Unity’s operation.
“The policy has survived that, and I think that’s noteworthy,” he said.