North Shore-Long Island Jewish Health System, the brash victor in a 1997 antitrust skirmish with the U.S. Justice Department, is now looking to grab even more turf on the eastern end of Long Island.
That would be evidenced in a deal with Peconic Health Corp., a three-hospital system on Long Island, which is the focus of an ongoing state antitrust probe.
Both systems stand to gain something from a marriage. Sponsorship under the 13-hospital North Shore-LIJ umbrella would enable Peconic to leverage the larger system's purchasing and contracting clout. By adding Aquebogue, N.Y.-based Peconic, North Shore-LIJ would broaden its reach across Long Island.
"Clearly this would give North Shore-LIJ a tip-to-tip network," said Michael Parker, an independent healthcare consultant in New York.
It's not certain whether the deal would hit an antitrust snag. "I wouldn't even dare to speculate (on the outcome)," said Robert Wild, a healthcare attorney with Garfunkle, Wild & Travis, Great Neck, N.Y. "Obviously, if a sponsorship arrangement would be entered into, it would be subject to antitrust review."
He said it's too early to know how the New York attorney general's review of Peconic, begun in 1998, will turn out. The review focuses on the 1995 creation of the three-hospital system. Peconic is licensed by the state as a hospital corporation but does not have an operating certificate, said Thomas Doolan, system president and chief financial officer.
The assets of the three hospitals- Central Suffolk Hospital, Riverhead; Eastern Long Island Hospital, Greenport; and Southampton (N.Y.) Hospital-are separate. The state is reportedly interested in whether Peconic is illegally negotiating rates for all three, which could be viewed as price-fixing. Peconic has a task force studying the issue.
Doolan said he isn't sure how the state investigation will affect talks with Great Neck, N.Y.-based North Shore-LIJ or plans by the three hospitals to merge assets.
"It's difficult for me to say because we have not received any report or decision by the attorney general," Doolan said. He noted that the federal government cleared Peconic's formation of any antitrust problems in 1997.
Because Peconic's eastern Long Island facilities are 30 to 40 miles away from the closest North Shore-LIJ facility, a Peconic deal should not reignite Justice Department worries about a Long Island monopoly, said Carol Hauptman, a spokeswoman for the mammoth network. The government failed in its antitrust suit to block the merger of North Shore Health System and Long Island Jewish Medical Center into North Shore-LIJ.