The recent deregulation of hospital rates in New York is beginning to bear fruit, with two new consolidations announced last week.
In Buffalo, N.Y., three hospitals announced a letter of intent to merge into a single healthcare system with 1,888 licensed acute-care beds, 1,751 physicians and total assets of $596 million.
In a joint announcement last week, Millard Fillmore Health System, Buffalo General Health System and Children's Hospital said they will seek federal antitrust clearance and state approval to combine assets into a single enterprise. The merger is projected to save $214 million in the first five years. It is projected that the system will represent 33% to 35% of the local market. The partners hope to execute a definitive agreement by Aug. 1.
"In our own region, this is a big deal, that's for sure," said William Pike, president of the Western New York Healthcare Association. But he said the system will face competition from the region's Catholic providers, which are making progress on plans to create their own healthcare delivery system.
The proposed deal caps months of study by a joint committee assigned to evaluate the feasibility of a full-asset merger. Last year, the triumvirate agreed to establish a new regional system with its own governance.
The hospitals said the merger planning process will include community and business leaders, and a three-to-five-year "roadmap" of the system's strategic direction will be produced.
The system is temporarily operating under the name CFH Health System, although a new name and logo will be created as part of the strategic planning process.
In a separate announcement last week, F.F. Thompson Health System in Canandaigua, N.Y., and Clifton Springs (N.Y.) Hospital and Clinic said their boards have approved a recommendation to form a new parent corporation. The new system will begin operating within six to 10 months of receiving regulatory approvals.