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Pending Merger Viewed as a Boon for CNY

Expert: if approved, merger between Crouse Health and SUNY Upstate should not have negative effect on Oswego Health or other regional hospitals

By Stefan Yablonski

SUNY Upstate Medical University announced its plan to acquire Crouse Hospital in early 2022. If approved, Crouse, a nonprofit, will merge into Upstate’s health system and be renamed Upstate Crouse Hospital.

The proposal must be approved by the state; which may take quite a long time.

“It is not unusual for this kind of transaction to take an inordinately long time and it has only been a few months since the announcement,” said Thomas H. Dennison, professor emeritus, The Maxwell School, Syracuse University. “The Federal Trade Commission has completed its study and the other parts are under review by the New York State Department of Health. After internal DOH reviews, it goes to a series of committees. I have seen these transactions take a year,” 

According to George Chapman, a health-related consultant based in Syracuse, the proposed merger will go through. “It will happen, despite what the FTC thinks. Crouse needs to be rescued from its financial straits because the CNY community needs the beds,” Chapman said.

“It will not necessarily have a direct impact on the surrounding community hospitals. But, smaller community and rural solo hospitals face the very same challenges: financial viability, recruiting and retaining qualified physicians and keeping up with advanced medical technology,” he pointed out.

“It is indeed a trend, nationally and statewide. Just look around at other metropolitan areas. Utica had four hospitals; now has one. Rochester, I can’t even count, had so many hospitals. Now it’s essentially down to two systems. Buffalo had several as well. So it is very, very much a trend,” said Dennison.

Stand-alone hospitals are becoming a thing of the past, he added, citing Oswego and Watertown for example.

“There are a lot of reasons hospitals are merging,” Chapman agreed. “Number one is ‘let’s stop competing with each other for doctors.’”

“I think that it is a good thing for the smaller hospitals in the region that rely on the specialty and sub-specialty services that can only be provided at scale at a referral center,” said Dennison. “We don’t want to see patients sent all over the state to access specialty care because the Syracuse hospitals are unable to recruit and retain the talent needed.”

“I think physicians in particularly, are seeking positions in larger hospital systems for a sense of security and, due to greater number of colleagues, better coverage, and less time on call. Bigger hospital systems have a far better chance at the negotiating table with the huge national commercial insurers,” Chapman pointed out. “Smaller solo hospitals lost their ‘only game in town’ argument with payers due to improved transportation and telemetry.”

To survive, he said, “solo hospitals will eventually have to merge into a larger system.”

“Oswego Health is committed to providing extraordinary care to every patient that comes through our doors at any one of our 17 locations. We work in partnership with Upstate, Crouse, St. Joe’s, Auburn, Oneida, Samaritan and all other healthcare facilities and providers in our region,” said Michael Backus, president and CEO of Oswego Health.

Like every other hospital health system in Central New York, Oswego Health is watching the news of a possible merger between Upstate and Crouse, he noted.

“The impacts of that potential consolidation are being reviewed and Oswego Health certainly stands ready to work with other regional healthcare entities to ensure Central New York has the caregivers it needs to support our community,” he said.

“I always look at it as ‘bigger is better.’ I think it will be good for consumers. If they are able to have enough beds and enough doctors they will have a complete network so when they go to market themselves, as the Upstate Network, if you will, they’ll have a complete roster of physicians to become a large health system.  People will have a lot of choices,” Chapman said.