January 22, 2019

Affiliation expectations

Guthrie’s transition process with CRMC won’t differ from other hospitals

Jake DeRochie/contributing photographer

June and Ron Price, of Virgil, visit the Cortland Regional Medical Center hematology department for blood work Friday. June Price said she chose CRMC because of the convenience.

Cortland’s hospital will have a new name and undergo several changes next year because of its affiliation with Guthrie Medical Center — which sees the medical center investing $100 million into the Cortland hospital over five years.

Some changes like new signage and additional services will be the first apparent changes, according to Paul VerValin, executive vice president and chief operating officer at Sayre, Pennsylvania-based based Guthrie, while other changes will occur over time.

“Transition over time is important,” Ver- Valin said. Guthrie is trying to identify the needs of the community and the hospital to see what should be added.

Guthrie’s affiliation with the Cortland Regional Medical Center was approved in October by the state Department of Public Health and the Public Health and Health Planning Council, with medical center President Mark Webster stating the “the curtain will drop Jan. 1” on forthcoming changes.

The first apparent one to be the hospital’s new name: Guthrie Cortland Medical Center, an entity of The Guthrie Clinic.

The affiliation is not Guthrie’s first time going through the affiliation process. It’s already affiliated with the Towanda Memorial Hospital and Troy Community Hospital in Pennsylvania and the Corning Hospital in Corning, New York.

The affiliation process those hospitals went through won’t differ much from what the Cortland hospital will go through.

“Our goal is to strengthen hospitals and invest in the community the best way we can,” VerValin said.

That’s what happened in Corning when its hospital affiliated with Guthrie in 1999.

“I think it was a positive thing for our area,” said Darlene Smith, public health director of Steuben County, where Corning is located. “When the hospital affiliated (with Guthrie), it really increased access to services for residents and improved services.”

Expected additions

In the early months of Guthrie’s affiliation with Corning, more procedural space was added, and a another operating room opened, said Michael Scalzone, executive vice president for medical affairs of Guthrie. Before working with Guthrie, Scalzone was a practicing obstetrician-gynecologist at the Corning Hospital.

Additional resources, such as lab space and radiology were added later, he said.

“Our goal was to strengthen and stabilize services,” VerValin said. “We wanted to make sure we did an assessment of services in Corning, then build from there.”

The addition of special services in Corning helped the community, Smith said. Residents who had to go elsewhere for specialized services could now stay in Corning.

“We wanted to make sure we could provide patient choice, so they don’t have to leave the community,” VerValin said.

However, patients won’t be forced to stay, he said. Doctors will direct them to the best care, and the patient can choose where they want to go.

The same will happen in Cortland, he said, as the medical center will also see added services. What those services will be is still being determined.

“What’s added depends on Cortland’s needs,” Scalzone said. No services the hospital already provides will be taken away, either. They’ll be strengthened, he said.

Guthrie will do a study of why people may be leaving the county for other services to see where improvements can be made, according to VerValin.

Along with new services, Guthrie will provide the Cortland hospital with an advanced medical records system, connected to all Guthrie hospitals, VerValin said.

“The Cortland community deserves a strong hospital,” he said.

Building new hospitals

Of the three hospitals Guthrie has affiliated with, so far, the Corning and Troy hospitals had entirely new facilities built for them by Guthrie.

At the beginning of the affiliation process, Guthrie does an infrastructure study of the hospital to see what needs to be improved.

From a clinical standpoint, the infrastructure in the Corning hospital was so old it couldn’t just be upgraded, Scalzone said.

Guthrie looked into just renovating the hospital, but determined it would be more cost effective to just build a new 65-bed facility, VerValin said. It was a $150 million project with no state assistance.

He does not expect Cortland will need a new facility.

“We’re pleased with Cortland’s facility,” VerValin said. “While some of the building is old, it is not in the same place as Corning.”

A building assessment was recently done for the Cortland hospital. VerValin said he’ll have to wait for the results of that to see what needs to be upgraded.

Residents of Corning were upset at first about a new hospital being built, because the new facility would no longer be located in the city, Smith said. But they eventually settled down.

Retaining staff

When Guthrie did come into the community, Smith said she does not recall a loss of jobs or any major turnovers.

Over time, more Guthrie physicians did come into the Corning area. Some local physicians stayed, Scalzone added. Some competing doctors were even hired to work at the hospital.

Guthrie has contracts with vendors for various tools and equipment, allowing the hospitals to get the items at cheaper prices. However, VerValin said Guthrie will take into consideration local vendors.

Cortland Medical Supply, part of the Cortland hospital, will continue to provide medical supplies under the Guthrie affiliation.

Also, if there is specific equipment doctors like to use, they’ll still be able to do so, he said.

Administration in all three Guthrie-affiliated hospitals have changed over time. Leaders in the Corning hospital made their own decision of when to leave, VerValin said.

“There was no pushing by Guthrie on when to leave,” he said.

Guthrie is comfortable with the leadership at the Cortland Regional Medical Center, he said.

“We are very committed to that leadership team, as along as they are committed to us,” VerValin said. “Our hope is they stay with us.”

In October, when the affiliation was announced, Webster said he does not plan on going anywhere.

VerValin said he could not give a specific time frame on when changes with the Cortland hospital will begin to appear. Although he does not anticipate doctors, nurses and staff to see any right away.

They’ll know about any future changes, too, he said. There won’t be a surprise.

“They’ll be a part of the discussion,” VerValin said.

In the first six to 12 months of the affiliation, VerValin said, Guthrie and its new hospital will determine how Guthrie can best use its $100 million investment.

Benefits of the affiliation that are already apparent include:

n $41 million in infrastructure and electronic records upgrades over five years.

n No cuts in services for at least 10 years, without both organizations’ approval.

n Local control of the 162-bed hospital and 80-bed nursing facility.

n Access to some of the most advanced health care in the world — through an affiliation with the Mayo Clinic.

Affiliation history

The 740-employee Cortland Regional Medical Center — with 40 doctors and advance practice providers — began looking for an affiliate in 2016 to improve efficiency and reduce purchase costs, issues contributing to a $7 million-a-year operating deficit when Webster was hired in January 2014.

In 2016, the hospital lost $10.4 million, which was down from the $13 million it lost in 2013.

Of the $10.4 million it lost, most of it, $5.5 million, was in depreciation from aging equipment and properties, not cash.

The hospital’s board of trustees has also said federal pressure to consolidate, increased regulations and changes in the healthcare system drove the decision.

A larger health organization can negotiate with suppliers, including pharmaceutical companies, for lower prices. The hospital reported recently that it expects to see a 30 percent increase in drug costs — to $4.7 million — this year. So far this year, pharmaceutical companies have announced increases on 106 medications; Pfizer has announced an increase on 41 more drugs in January.

The medical center’s deficit has been largely eliminated, and a $19.8 million state grant paid off capital debt from financing the emergency room, built in 2003, and previous nursing home construction.

Webster has said that helped make the hospital more attractive to potential affiliates.

Guthrie, a 300-doctor, 200-advanced practice provider network based at the Robert Packer Hospital in Sayre, Pennsylvania, is itself affiliated with the Mayo Clinic, a 4,500-doctor research-oriented health network whose keystone facility in Minnesota was rated the best hospital in America by U.S. News and World Report.

Other benefits

Along with improving health care in Steuben County, Smith said there was a larger effect on the community. Because the affiliation provided more resources to the Corning hospital, and made it more profitable, it was able to sponsor the Wineglass Marathon in the county, which attracts more than 1,000 people.

She said she also believes there’s been a trickle-down effect from the affiliation where more jobs have been added, bringing more business to the area.

The affiliation has made an impact, she said: “The hospital can be more active in the community.”

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