Like a shark-attack victim screwing up the courage to splash in the surf again, the president of 319-bed St. Francis Hospital and Health Centers in Poughkeepsie, N.Y., mused in the local paper in December 2006 that he was open to exploring ways to collaborate with the towns other hospital, 355-bed Vassar Bros. Medical Center.
Theyd tried it before in the 90s, and it didnt end well. The state attorney general attacked their arrangement, accusing the hospitals of illegal price-fixing and market allocation under federal antitrust law. In 2000, a U.S. District Court judge in New York agreed, and the hospitals signed a consent order compelling them to abandon their alliance.
Despite the Poughkeepsie experience, which was considered a landmark ruling that could discourage joint operating agreements, several hospitals and systems this year have been feeling out new cooperative relationships of varying scope and motivation. They include three Maine systems that signed a one-year agreement to team up on technology, purchasing and public health, and a pair in Milwaukee that intend to integrate significant portions of their operations.
There are a lot more conversations occurring again between organizations, between health systems, said William Petasnick, chairman-elect of the American Hospital Association. Some of this is a reflection that the times are changing again, said Petasnick, who is president and chief executive officer of one of the two Milwaukee systems in talks, Froedtert & Community Health.
Those changes include greater cost pressures driving interest in economies of scale, Petasnick said, as well as opportunities to forge stronger collaborative links and provide better continuity of care. Sometimes its technology, access to capital or people examining again what may occur downstream with regard to health reform and trying to be proactive.
And in New York, state regulators now are forcing former competitors into each others arms to address surplus hospital capacity.
Joint-operating agreements or lesser forms of collaboration are appealing to organizations that feel the same pressures but are reluctant to dissolve their identities and missionssuch as Catholic organizations and their ethical and religious directivesinto an actual merger of assets and operations under a single corporate organization.