THE BLOG
04/20/2010 05:12 am ET Updated May 25, 2011

Weathering the Economic Storm Amid a Shifting Health Care Landscape

The news that St. Vincent's Hospital may merge with another hospital system in order to survive highlights the need for smart consolidation in today's weak economy. While it is painful to see one of New York's oldest and most venerable hospitals struggling to keep its doors open, St. Vincent's Hospital's plight underscores the challenges affecting health care providers across the state: high operating costs, long lengths of stay, high debt levels, aging facilities, excess capacity, inefficiencies, and increasing demand from impoverished and uninsured patients.

Making matters worse, last year marked the beginning of one of the most severe economic downturns since the Great Depression. As New York continues to weather the downturn, health providers throughout the state face even greater challenges in 2010.

These pressures are forcing many health care providers to scale back programs, decrease the number of people they serve, and in some cases, close their doors. During such tough economic times, the only way many of these organizations will survive is by teaming up with others to create more sustainable institutions.

We've seen mergers and partnerships in health care before. They became a preferred tool in the health care sector during the 1980s and 1990s, and over the past 30 years a steady list has formed of those that worked out well and those that did not. Our Foundation has received many requests for help with mergers from nonprofits across the state, and we have been able to help support a limited number of proposed mergers that involved essential services.

We are learning that in 2010, mergers and partnerships continue to play an important role in shaping the health care landscape--but only when done right.

There's no one-size-fits-all approach that works when it comes to combining a community health center or hospital with another institution. Nor do mergers that simply seek to prolong and prop up faltering institutions bring lasting benefits or change.

What's needed are mergers or partnerships that improve efficiency for providers and bolster their mission for providing care. Whether it's working with people who are homeless, those who are chronically ill, or other high-need populations, the emphasis must be on sustaining high-quality care.

Several health care organizations throughout the state are setting the right example.

In Buffalo, four small community health care providers focused on HIV/AIDS prevention and care are in the process of merging to become the AIDS Community Services of Western New York. By merging and streamlining the back-office operations, the new organization will be able to cut costs and spend more of its time and resources on its health care work.

Another merger is underway in Brooklyn, where the Brownsville Community Development Corporation is taking over several primary care clinics from Long Island College Hospital. The acquisition will allow Brownsville to continue services at these critical health clinics, while relieving some of the operating overhead from Long Island College Hospital. Brownsville will integrate the primary care clinics into its existing network of providers, allowing it to expand coverage without adding back-end costs.

These efforts are focused on both ensuring long-term sustainability and maintaining as many core services as possible: a formula that allows all parties involved to weather the current economic storm and continue to serve the populations most in need.

Coming back to St. Vincent's, it's clear that the role St. Vincent's plays in providing charity care to thousands of patients cannot go unfulfilled. Perhaps the kinds of partnerships that other organizations in the State have undertaken can serve as a model for St. Vincent's to get back on track to maintain its commitment to the New Yorkers who need it.