“Our intentions are to expand north and provide care to a larger patient population,” Dr. Steven M. Safyer, president and CEO of Montefiore Health System, told the Business Journal in a wide-ranging interview at his Bronx office in late December.
That northern expansion already was well underway and focused on southern Westchester County as he spoke. Yet little more than a month later, with the recent announcement that White Plains Hospital has agreed to a partnership with Montefiore at the center of a regional network of hospitals and physicians with a service area of nearly 3 million people, it seems that northward advance by the Bronx-based academic medical center had only just begun.
In July last year, in an $8.75 million deal more noted by real estate brokers than by the press, Montefiore closed on its purchase of 250-270 East Sandford Boulevard in Mount Vernon, a vacant 107,000-square-foot industrial building on a 2.5 acre site. Safyer in December said the building will reopen in about one year as the new central laboratory for Montefiore Health System, which performs 12 million laboratory tests annually at its current Bronx location. The laboratory complex will employ about 300 workers.
That Mount Vernon purchase came about a month before a U.S. Bankruptcy Court judge approved Montefiore”™s acquisition of assets of Sound Shore Health System in Mount Vernon and New Rochelle. Sound Shore in May last year filed a Chapter 11 bankruptcy petition as a condition of its negotiated deal with Montefiore.
That first venture north by Montefiore into southern Westchester”™s community hospital operations came shortly after Westchester Medical Center officials tersely announced the Valhalla institution had broken off exclusive talks with Sound Shore Health System over a possible alliance or takeover.
In November, Safyer was greeted in New Rochelle by what he called “ecstatic” hospital workers at the opening of Montefiore New Rochelle, the former Sound Shore Medical Center facility acquired in the $54 million bankruptcy deal that also rescued the former Mount Vernon Hospital and Schaffer Extended Care Center in New Rochelle from imminent closing.“People were trembling. They were crying. They were hugging each other,” Safyer recalled.
“Every one of those people was about a week away from not having a job,” he said. “It was a $200 million enterprise that was on a burn rate of about $50 million a year. They had no cash, no liquidity. It was about to die.”
Sound Shore”™s dire financial situation “was partially an artifact of the changing nature of health care,” he said. Small independent hospitals lack the scale to survive in the emerging new era of more cost-efficient and coordinated care. “The scale and size of the organization with the medicine is the future,” Safyer said. “That”™s why you”™re seeing consolidations in health care. It”™s not just institutions that are failing. Institutions that are successful will connect with larger systems.” That process is “inevitable,” he said.
The CEO”™s prediction was borne out in the joint announcement this month that White Plains Hospital directors agreed to enter into a partnership with Montefiore. White Plains Hospital CEO Jon Schandler, who plans to retire in 2015, said the hospital will operate under its own state certificate and keep its own board of directors and management under Montefiore”™s sponsorship.
The 292-bed community hospital on East Post Road and three other community hospitals in the county in 2013 received approval from the state Department of Health to break ties with Armonk-based Health Star Network Inc. ”“ which does business as Stellaris Health Network ”“ as their parent company. That allowed the hospitals to seek new partners on the shifting health care landscape.
One former Stellaris member, Lawrence Hospital Center in Bronxville, in January asked the state health department to approve its takeover by New York-Presbyterian Hospital, with which it currently has an affiliate agreement.
Schandler said White Plain Hospital”™s broad affiliation with New York-Presbyterian ended at the close of 2013. “They had made a commitment to Lawrence,” he said. Some medical services agreements between the two hospitals will terminate during this year, he said.
Schandler said both his institution and Montefiore will do their due diligence in the pending deal over the next six to eight weeks and seek state approval of their partnership. He said he hoped to complete the deal by summer.
As sponsor of White Plains Hospital, Montefiore will make “a very substantial capital contribution” to its new partner, Schandler said. He declined to disclose the amount.
Safyer in the recent announcement noted the “tremendous synergy between our two institutions and our people” and their shared fundamental values.
“Our vision is to build a regional network of hospitals and community physicians closely aligned in an integrated system of care,” Safyer said. “White Plains Hospital will be the center of that network to strengthen and expand our position as a health care leader in Westchester and the Hudson Valley.”
Schandler said the partnership with Montefiore will add “clinical sophistication, scale sophistication, care management sophistication” to White Plains Hospital. “Our goal is to continue building sophistication,” he said.
Safyer in his December interview suggested there is more to come in Montefiore”™s northern expansion. He acknowledged that Montefiore has had talks with St. Joseph”™s Hospital officials in Yonkers. It had declined an invitation to enter discussions with Lawrence Hospital officials in Bronxville, he said.
“It”™s a competitive market,” said Safyer. “I like competition.”
As a long-time employee of Montefiore, I’m thrilled to see Montefiore expanding into the Hudson Valley. It’s important for those of us who resdie in Westchester, Rockland, and beyond, to have a top-notch health system available for our residents. Go Monte!