If successful, Upstate University Hospital would become the largest hospital in Central New York.
Upstate Medical University wants to acquire Community General Hospital and merge it into Upstate University Hospital (above).
Upstate Medical University wants to buy Community General Hospital and merge into one hospital with two Syracuse campuses.
Such a merger would dramatically shake up the Syracuse hospital market, making Upstate the largest hospital in Central New York. It would move from No.3 to No. 1 in terms of inpatient market share.
At a meeting in Albany Tuesday, the State University of New York board of trustees approved a resolution authorizing Upstate to explore an acquisition of Community.
Upstate wants more hospital beds so it can grow. “Such an acquisition would ... facilitate a larger platform within Syracuse to launch a broader regional vision for the university,” the document said.
Upstate, which is part of SUNY, is an academic medical center with a 409-bed teaching hospital – Upstate University Hospital — and a college of medicine, nursing, health-related professions and graduate studies.
Community is a private nonprofit hospital on Onondaga Hill with 306 beds.
The two institutions first disclosed in May they were exploring a strategic affiliation after Community broke off merger talks with Crouse Hospital. But Tuesday was the first time they publicly disclosed they are looking at an acquisition and merger.
Dr. John McCabe, Upstate University Hospital’s chief executive officer, said a pricetag on the proposed acquisition has not been calculated yet. Officials at both institutions are analyzing the financial and clinical details of a proposed merger.
“Most of us are of the opinion that moving as far as we can toward having one university in two campuses probably would make the most sense,” McCabe said.
Upstate and Community will have to overcome some major hurdles to pull off a deal. For starters, Upstate is a state institution while Community is a private nonprofit. However, a similar acquisition is pending in the New York City area where SUNY Downstate Medical Center is poised to buy the nonprofit Long Island College Hospital.
Another challenge facing the deal are labor unions. Employees at Upstate and Community are represented by different unions.
Tom Quinn, Community’s president, said his hospital and Upstate drafted a vision and a set of principles for the proposed relationship.
“We will be looking at how do we achieve that vision so we have respect for the voluntary medical staff and respect for employees and their labor contracts,” Quinn said.
Community has lost money in recent years and its market share has been shrinking.
“We want to be a part of a larger health system that gives us an opportunity to continue to serve over the long haul our patients and service area,” Quinn said.
Upstate has a broader array of subspecialties while Community brings to the table high quality private practice groups with plenty of patients, Quinn said.
The acquisition talks are going on at a time when the state is in dire financial straits.
McCabe said an acquisition probably would not require a big infusion of state dollars. Most of the money could be borrowed, he said. Upstate University Hospital gets about 6 percent of its funding from the state and the rest from patient revenues. “If we continue to do that well our finances can remain robust, despite the finances of the state,” McCabe said.
Upstate has retained PricewaterhouseCoopers to develop a business plan for the proposed merged entity.
“We want to be respectful of the long history and tradition of Community and we want to be respectful of the large group of physicians who utilize Community as a place to take their patients,” McCabe said.
James T. Mulder can be reached at 470-2245 or jmulder@syracuse.com