IT’S A WHATCHAMACALLIT. A partnership? Nope. Marriage of convenience? Naaah, not that. How about an Alliance? A Realignment? A Linkage? Collaboration? But of course, it’s an Affiliation. Better yet, a Strategic Affiliation!
What’s it mean?
Start with the following paragraph, which appeared Tuesday on the Facebook page of Columbia Memorial Hospital. “This is NOT a merger. It is NOT a consolidation. It is NOT a sale, and it is NOT an acquisition or a takeover. We are working to align our respective organizations to take advantage of one another’s strengths. The final product of this work, and what we want to attain, could be best termed an ‘affiliation.'”
The plan by Columbia Memorial Hospital (CMH) to hook up in some manner with Albany Medical Center is also legally known as a “sponsorship affiliation,” but who’s quibbling. After months of anticipation and rumors flying like mosquitoes at dusk, the boards of CMH and AMC have come to an understanding that they’d like to come to an understanding–with each other. Is this the old joke about an OB/GYN diagnosing a patient as half pregnant?
More accurately it’s a small step forward at a time when neither of these two hospitals, like most others, knows how their financial futures will play out. And in a strange way they need each other, though even if they pull off an affiliation of some sort, the two sides are far from being equals.
Counting hospital beds alone, AMC is four times as large as CMH and growing by the day. When you factor in the medical and health sciences school and the medical center’s provider network, AMC dwarfs CMH. But healthcare providers function like other businesses, and market share matters. Together Columbia and Greene counties have a population of over 100,000 in a competitive healthcare market. It’s a market big enough and close enough for AMC to pursue, and CMH is by far the best local partner to have.
Patients who receive the services they need from a combination of CMH facilities already in place and easy access to higher levels of care from AMC make AMC better able to compete with rivals like St. Peter’s. Other competitors include the hospitals in Pittsfield, MA, Sharon, CT, Kingston, Rhinebeck, Poughkeepsie, New York City and Boston. Healthcare is a rough business.
Vague language can signal weakness and muddled thinking. But in this case the vagueness about affiliation specifics points up the strength of the CMH board’s convictions if not their options. CMH will always be the junior partner in any venture with AMC, but unlike a merger or sale, a fuzzy affiliation agreement could leave CMH with its autonomy mostly intact. This allows CMH to dispel the notion that it’s grasping for a bailout from the highest bidder.
The relatively strong position of CMH could change for the worse, leaving the board with no choice other than a merger or sale. But for now the hospital board is insisting on retaining control over the fate of CMH. That’s reassuring.
Less obvious but equally important, an agreement with AMC affirms the principle that CMH is a secular institution. That is a principle the community has supported for more than a century and one that must continue.
The elephant in the room in these discussion is the Affordable Care Act. Although best known for its expansion of healthcare insurance to many more Americans than ever before, it is the changes in government reimbursements and new requirements for digital medical records sharing and data driven measurements of the quality of service that are forcing changes in the healthcare industry. The top hospital executives from CMH and AMC who spoke on the record this week about the affiliation discussions acknowledged as much without directly referring to the act or to its more common name, Obamacare.
Medical costs were going up faster than inflation well before adoption of Obamacare, and the aims of the new healthcare law are to impose some discipline on healthcare system and its finances, to improve the delivery of medical care and make those services more efficient. It’s no coincidence that those goals are reflected in the affiliation discussions outlined this week by CMH and AMC. It’s about time.
The boards of CMH and AMC have plenty of work ahead to hammer out a deal that improves the health of Colombia and Greene county residents and leaves each hospital free to govern itself. Affiliation may be a flimsy tool to achieve that end, but it’s beginning to look like the best option available.