Regional News/Northeast: Mount Sinai, Continuum to form N.Y. giant

By this fall, a health system that brings together the operations of Mount Sinai Hospital and Continuum Health Partners could eclipse New York Presbyterian Hospital as the largest provider in the city aside from its public safety net system, New York City Health and Hospitals Corp.

The boards of Mount Sinai and Continuum, which includes Beth Israel Medical Center, voted to create Mount Sinai Health System in a transaction and expect to win regulatory approval in the next few months. The providers entered talks a year ago, abruptly ending negotiations between Continuum and NYU-Langone Medical Center.

Mount Sinai President and CEO Dr. Kenneth Davis will serve as president and CEO of the merged system. Continuum President and CEO Stanley Brezenoff plans to retire when the deal is done and serve as an adviser during the transition. Mount Sinai Board Chairman Peter May would assume that role over the new system.

Continuum's three hospitals—Beth Israel, St. Luke's Hospital and Roosevelt Hospital—bring in combined annual revenue of about $2.8 billion, according to the system's website. Mount Sinai's revenue for the year ended Dec. 31 was $1.8 billion, according to results reported to bondholders. The city's long-reigning Goliath, New York Presbyterian Hospital, reported $3.8 billion in revenue in 2012.

Davis signaled that he does not expect antitrust scrutiny to slow the deal. Matthew Cantor, an antitrust lawyer with the firm Constantine Cannon, however, said he expects both the Federal Trade Commission and New York attorney general to review the deal closely because it would significantly consolidate emergency services for the city's West Side.

The question antitrust authorities will examine, Cantor said, is the degree to which the Mount Sinai-Continuum merger is “creating even more of a must-have hospital system for insurance plans.” That would give the new not-for-profit hospital giant greater negotiating leverage with plans on rates.

The agreement calls for the Icahn School of Medicine at Mount Sinai to become the sole academic affiliation for the merged system, and all physicians and scientists affiliated with Continuum hospitals would assume appointments with Icahn, according to the release.

—Gregg Blesch