Cortland Regional Medical Center plans to affiliate with Guthrie medical system, a four-hospital, 45-site health network spanning 11 counties in New York and Pennsylvania.
The potential affiliation announced this morning, at the moment non-binding, caps a yearlong search for a partner for the 162-bed Cortland facility, which also has an 80-bed residential care center.
“Guthrie has committed for 10 years to have no reduction in services,” said hospital chief executive Mark Webster, at a news conference with state Sen. Jim Seward (R-Milford), and Jeff Seibert, vice chairman of the board of trustees.
Guthrie has promised $41 million in investments over five years in infrastructure and electronic records.
The 740-employee hospital began looking for an affiliate in October 2016 as a way to improve operational efficiency and reduce purchase costs, issues contributing to a $7 million a year operating deficit Webster encountered when he was hired in January 2014.
The hospital’s board of trustees also said federal pressure to consolidate, increased regulations and changes in the health-care system drove the decision.
A larger health organization can negotiate with suppliers, including pharmaceutical companies, for a lower price. The hospital reported recently that it expects to see a 30 percent increase in drug costs — to $4.7 million — this year.
The deficit has been largely eliminated, and a recent $19.8 million state grant paid off capital debt from financing the emergency room, built in 2003, and previous nursing home construction.
Both developments would make the 125-year-old health organization more attractive to a suitor.
Guthrie, a 300-doctor, 200-advance 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.
Besides the hospital in Sayre, Guthrie has hospitals in Corning, Troy and Towanda, Pennsylvania, totaling 379 inpatient beds and 20 observation beds. It also has a network of five walk-in clinics, six medical supply stores, a 66-bed assisted living facility and 5,500 full- and part-time employees.
Cortland Regional, besides the hospital and nursing home, has eight other locations in Cortland and Homer. It employs 43 doctors and advance practice providers for a region including 74,000 people in and around Cortland County.