Optima Healthcare, New Hampshire's largest healthcare system, which has more governing boards than hospitals, appears headed for dissolution, a casualty of community backlash to hospital consolidation.
In a powerful assertion of local control, two special boards of directors convened to re-create the pre-merger governance of Elliot Hospital and Catholic Medical Center, recommending last week the "re-establishment of two separate hospitals" to serve Manchester, N.H., where Optima is based.
Elliot and CMC are Manchester's only two acute-care facilities and the latest monopoly having problems in a town that formerly had two independent hospitals (See related story, below).
"It is our conclusion . . . that the needs of each hospital and the community will be met best if we operate separately," said Rev. William Donoghue, chairman of Elliot's special board.
After its plan to move all acute-care services to Elliot from CMC drew fire from New Hampshire Attorney General Philip McLaughlin, Optima agreed last year to form the boards to review the hospitals' original merger agreement and subsequent consolidation strategy.
The special boards are separate from the system's 13-member board, a 16-member regional board and the two boards of the individual hospitals. The special boards' findings are not legally binding but should weigh heavily with McLaughlin and Optima executives.
If Optima bows to the special boards' wishes, the 5-year-old system would be one of the first in the country to dismantle itself in response to community discontent. In so doing, Optima may lay a course for other communities to follow to nullify unpopular hospital mergers.
Ironically, executives of the two hospitals persuaded federal antitrust regulators to overlook the hefty market share they'd gain from the merger because of the merger's alleged community benefits. The merger was cleared after a lengthy antitrust investigation and pressure from some political heavyweights.
The special boards' recommendations thrilled consolidation opponents. "Mergers may be happening all over the country, but here it's not going to happen," said Michael Quinlan, a leader of the "Save CMC" community group. Former state legislator Donald Welch, who prodded the attorney general to act, called the decision "a victory for the people."
Unscrambling the Optima omelet would be difficult and embarrassing.
Elliot, with 238 beds, merged with 242-bed CMC in 1994, to form Optima Health. The hospitals entered a mergerlike affiliation with a third hospital, 150-bed St. Joseph Hospital in Nashua, N.H., and all three are governed by a joint operating company called Optima Healthcare. St. Joseph is owned by Lexington, Mass.-based Covenant Health Systems, which is Roman Catholic.
Covenant spokeswoman Nancy Mulvihill said Covenant and St. Joseph's board were expected late last week to begin discussing how to proceed.
Before and shortly after the CMC-Elliot merger, Optima officials said the hospitals would continue as locally governed full-service, acute-care facilities.
Less than a year later, however, Optima unveiled plans to shift all acute care and emergency services to Elliot. The controversial plan stoked the fires of community discontent, already smoldering over disagreements about the hospitals' divergent religious missions.
Principally a secular hospital, Elliot includes trustees from five Manchester Protestant churches on its board. Differences over abortion appear to have been a key factor in the recommendation to send the hospitals their separate ways.
Optima President and Chief Executive Officer Douglas Dean said the special boards' recommendations stirred "disappointment" at the health system. He declined to discuss options for Optima until the health system's parent board and the regional board governing the two Manchester hospitals have reviewed the special board's reports.
However, he did say that Optima's "boards are very much focused on allowing this community to heal and to allow the hospitals to refocus on the provision of healthcare services."
Meanwhile, the special boards are expected to file their reports with the state attorney general's office, which last year said the Optima merger had violated state charity laws. The attorney general is expected to bring a resolution of the Optima charity issues before a state probate court.