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Jan 21, 2015 10:38 AMPublication: The Southampton Press

Southampton, Stony Brook Partnership Will Mean Big Changes For Local Hospital

Jan 21, 2015 11:32 AM

Last week’s approval, by the Board of Trustees of the State University of New York, of a pending partnership between Southampton and Stony Brook University hospitals will spell many long-term changes for the local institution once the deal is finalized.

The arrangement still needs approvals from the offices of the attorney general and the state comptroller, plus a certificate of need from the State Department of Health—all considered routine, but all of which will take time. Southampton and Stony Brook officials have said most details of the integration won’t be hashed out until those approvals come in, which State Senator Kenneth P. LaValle said he envisions happening by June.

Hospital officials noted that while the partnership, which was years in the making, will bring tremendous financial benefits to each facility, its sole purpose is to introduce a new era of regional health care to the South Fork, an area known to be medically underserved.

“It makes good sense economically, but the real driver was strengthening clinical services,” Robert S. Chaloner, Southampton Hospital’s president and CEO, said this week. “Our primary responsibility here at Southampton is to ensure that health service is available locally for a very, very long time.”

The Ultimate Goal

The long-term vision surrounding the deal is the eventual construction of a new Southampton Hospital on the 82-acre Stony Brook Southampton campus in Shinnecock Hills. It is slated to take up about 13 acres of the campus.

There are no blueprints or building sketches just yet, nor has a specific location on the property been pinpointed, but that aspect will become clearer once the remaining approvals are granted.

It will cost an estimated $250 million to build the new hospital, sourced entirely by fundraising on Southampton’s part. The building would be similar in size to the current 250,000-square-foot facility on Meeting House Lane in Southampton Village, but would include more single rooms for patient privacy. It also will have fewer inpatient beds, as the hospital switches its focus more to outpatient care, since routine long-term hospital stays are becoming more rare.

Southampton Hospital is currently a 125-bed facility, but 25 of those beds will be transferred to Stony Brook University Hospital as part of the deal to help the latter facility accommodate more patients, as in many instances it operates at well over capacity. “Those are beds that are not well utilized here anyway,” Mr. Chaloner said.

Aesthetically, the new facility will be more modern, high-tech and energy-efficient, with a simpler layout than the current hospital. But the biggest difference, Mr. Chaloner said, will be more satellite sites sprinkled throughout the South Fork so that residents in East Hampton and Montauk, for example, won’t always have to travel to Shinnecock Hills for treatment.

As for the existing hospital, Mr. Chaloner said it is too early to know what will come of the historic building, which is more than 100 years old. While he acknowledged that millions of dollars have been invested in upgrading facilities and adding new centers at Southampton, he said that was to ensure patients were receiving the best care possible, even with the eventual move in mind.

Mr. Chaloner referenced the renovation of the emergency room. “That was almost five years ago. That ER’s seen a lot of people” since, he said, adding that equipment, at least, will be transferred to the new building. “I think by the time we’d be ready to move, that most of the facilities would be ready for a refresh anyway.

“It’s the people in the building that are really the most important thing,” he continued.

Staffing And Finances

Southampton Hospital is the largest employer on the South Fork, with about a thousand full- and part-time employees. Under the partnership agreement, all employees at Southampton Hospital, excluding its leadership team, will remain Southampton employees, and their labor contracts will stay intact. They will continue working for the Southampton Hospital Association as part of a lease agreement between the association and Stony Brook. Stony Brook also will lease all physical assets from Southampton, including the new building, and pay rent instead of laying out any cash for its development—retaining local ownership of all facilities.

Hospital officials, including the senior management team, will become Stony Brook employees. Mr. Chaloner’s title will change from president and CEO to chief administrative officer, although his duties and responsibilities will remain the same. Southampton also will keep its board of directors. A joint advisory committee made up of members appointed by both hospitals to oversee operations at each facility would be established as well.

Although Southampton will switch from a private entity to a public one—Stony Brook is operated by SUNY—it will still have its own budget. Additionally, it will be eligible for state funding, and officials have said that will open the door for many new revenue sources.

The partnership also includes a built-in agreement that enables Southampton to maintain control of its institution, should the plan take a turn for the worse. The agreement, Mr. Chaloner said, includes provisions stating that Stony Brook cannot pull the plug on the affiliation if it is not as successful as anticipated.

This condition came as a result of a failed acquisition of Long Island College Hospital in Brooklyn by SUNY Downstate Medical Center in 2011 that led to a loss of millions of dollars for SUNY after LICH was closed. “If that doomsday scenario were to happen [in our situation], the hospital continues to operate,” Mr. Chaloner said. “Our community doesn’t have choices the way they did in Brooklyn,” he said, referring to the fact that there is no other hospital on the South Fork.

Patient Care

For Southampton to have any chance at survival in the future, Mr. Chaloner said, it was crucial to seek out a partnership with a larger medical center.

As the health care market evolves and becomes more expensive for providers and patients, Mr. Chaloner said Southampton would not have been able to stand on its own financially or clinically. With a partner in Stony Brook, there will not only be the economic benefits, but also a positive shift in patient care, he said.

First, with a bigger umbrella of physicians available, the affiliation could mean more medical parks and more doctors opening practices on the South Fork. Second, the deal will enable both hospitals to coordinate care and specialize it, so that patients receive optimal treatment and an overall higher quality of service.

Doctors will be able to choose which facility would be more appropriate for treating a particular individual, and each institution will be designated for certain procedures. For example, Mr. Chaloner said that Stony Brook will continue to take on more extensive procedures, such as open heart surgeries, which Southampton doesn’t perform, while Southampton Hospital will continue to do simpler procedures such as appendectomies. An appendectomy performed at Stony Brook means “fewer beds available to do the more complicated cases,” Mr. Chaloner noted, and will also, in the long run, be more expensive.

Moving patients from Southampton to Stony Brook will also be more streamlined, as there currently is no formal process in place for sharing referrals and patient information. As for health insurance, the two institutions do not accept exactly the same insurance plans right now—Southampton accepts a wider variety than Stony Brook—but Mr. Chaloner said he envisions participation with health insurance companies to broaden for both hospitals. Officials are not going to talk about insurance strategies until after the partnership is finalized, however, he said.

With Stony Brook being a teaching hospital, plus the eventual new Southampton facility on the college campus, Mr. Chaloner said patients will see more medical students in the area. The academic presence could create a new pipeline of potential hires for Southampton, as well as the possibility of new doctors choosing to stay on the South Fork to open private practices.

Mr. Chaloner stressed that a partnership with Stony Brook is the best thing for the hospital in all aspects of its operations, but that it will still be a long way before any changes are seen.

“If we don’t do anything, we’re going to be in trouble. It’s important that we keep moving forward,” he said. “The deal is not done yet. We still have work ahead of us on that.”

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