FOCUS: ECMC/KALEIDA CONSOLIDATION
ECMC and Kaleida reach historic agreement to combine
Deal keeps facilities separate, preserves aid
Kaleida Health and Erie County Medical Center reached a historic agreement Monday on how to combine their institutions, creating a once-in-a-generation opportunity to remake Buffalo’s inefficient health care system.
The deal settles a lawsuit brought by ECMC against the state, preserving $65 million in state aid to close Kaleida’s Millard Fillmore Hospital on Gates Circle and merge its operations into Buffalo General Hospital.
But in the bigger picture, the agreement, which still requires the state’s blessing, paves the way for long-sought changes in hospital care in the region.
These include construction of a center for heart and vascular care on the Buffalo Niagara Medical Campus and the formation of a hospital network aligned with the University at Buffalo that is in a better position to enhance medical programs, start new ones, replace aging facilities, recruit physicians and improve the training of new doctors.
“We have hopefully taken the first step toward creating a health care system that will serve this community for the next 50 to 100 years,” said Dr. Kevin Gibbons, vice chairman of neurosurgery at UB and a Millard Fillmore physician.
Remarkably, the consolidation had appeared doomed until the 11th-hour intervention of doctors who work at the hospitals and the careful guidance of State Supreme Court Justice John M. Curran, who is overseeing the case.
The state’s Commission on Health Care Facilities in the 21st Century had ordered ECMC and Kaleida Health to form a unified, nonpublic entity that includes UB by next Monday. But strong differences of opinion, personality conflicts and tit-for-tat advertising campaigns turned the effort into an acrimonious forced marriage.
In May, ECMC filed a lawsuit, which the county joined, accusing the state of proceeding unfairly, without a binding agreement specifing the medical center’s future role. Despite assurances otherwise, ECMC feared its important services would be stripped away and its cash used for other purposes.
The judge encouraged mediation, which broke down before resuming in the last few days.
Like a diplomat, Curran shuttled from group to group during eight hours of negotiations Sunday that involved almost 60 people, including all the hospitals’ key officials, County Executive Chris Collins, UB President John Simpson, the leaders of the UB medical school, a committee of physicians from ECMC and Kaleida Health, and an array of lawyers.
In the end, the parties resolved differences by giving the new organization multiple layers of representation, somewhat like the Senate and House of Representatives in Congress. Rather than trying to divvy up services between the hospitals, they established a process for making such decisions fairly.
“This is the most complex thing I have ever been involved with,” Curran said, adding that it also was the most rewarding thing he had ever done.
Under key elements of the arrangement:
• The hospitals will remain separate, but a state-appointed board — with representatives from ECMC, UB, Kaleida Health and the community — will have authority over major decisions.
• A physicians’ committee, half from ECMC and half from Kaleida Health, will have significant say over decisions involving medical programs.
• ECMC’s cash reserves will be used for capital expenses at the medical center’s Grider Street campus or to renegotiate contracts with its workers, especially to reduce the cost of retiree health insurance coverage.
But the details of the decision- making power given to the physicians might pose a potential sticking point in winning approval from the state, which is expected to respond by Wednesday.
Throughout much of the consolidation process, physicians had watched from the sidelines. But as the effort appeared headed for failure, doctors finally spoke loudly as a unified group.
In a key move, Collins filed a separate legal action June 10, seeking to force the state to close ECMC or Buffalo General unless an agreement was reached on how to combine them.
His Article 78 action refers to a section of the commission law: If Kaleida or ECMC failed to reach a binding agreement by last Dec. 31, the state health commissioner was to close ECMC or Buffalo General on High Street. The deadline later was extended to next Monday.
“We realized that if one hospital goes down, we all go down. And, if we don’t get the $65 million from the state, we all go down,” said Dr. Lawrence Bone, chairman of orthopedics at UB and a physician at ECMC.
Last week, the 450 physicians affiliated with UB — who practice and teach at ECMC, Kaleida or both institutions — called on the hospitals to require the involvement of doctors in major decisions.
The doctors also said that the consolidation must leave both ECMC and Kaleida Health with viable campuses and that the strengths at ECMC and Kaleida should be recognized and strengthened.
They cited trauma, burn care, orthopedics and psychiatry at ECMC; stroke, neurosurgery, cardiovascular care and pediatrics at Kaleida Health.
Concurrent with the doctors’ statement, UB threatened to remove the school’s doctor-training program from ECMC if the hospital didn’t join in the consolidation. Hospitals depend on the program for enhanced federal funding and bedside personnel.
“We came to the brink. People held their views to the end. But the physicians of Western New York have spoken in a way that means everyone can now move forward,” said Dr. David Dunn, vice president of health sciences at UB.
Collins filed his legal action over concerns about the county’s financial connection to ECMC, including an annual subsidy with a commitment to repay a $101 million debt. In 2004, then-County Executive Joel A. Giambra had converted ECMC into a public-benefit corporation to give it more management flexibility. He used the conversion to raise cash to delay a budget crisis but placed the debt on the hospital’s books.
Collins wanted a consolidation agreement that severed the county’s financial obligations. He didn’t get that, although he views the deal as the first step of an incremental approach toward that goal.
“None of us got everything we wanted. But it’s an historic day for health care in Erie County. We reset the table without saddling taxpayers with the bill,” Collins said.
He agreed to discontinue his legal action if the state approves the hospital consolidation.
