CMC, Dartmouth-Hitchcock to combine, but keep separate identities

Officials stopped short of calling it a merger, saying the more than a half-dozen hospitals involved would retain their own names and local leadership under the combined system, Dartmouth-Hitchcock Health GraniteOne.

“Patients will see more options and better access to high-quality coordinated care right here in New Hampshire,” said CMC CEO Dr. Joseph Pepe, who also is chief executive of GraniteOne Health. “Not only are we doing this for today, but we’re doing this for the future.”

The leaders of Dartmouth-Hitchcock Health and GraniteOne Health said it would be 2020 before they would receive all the required state and federal approvals and that it was too early to estimate cost savings and how their finances might be combined.

“We haven’t been able to get under the hood,” said Dartmouth-Hitchcock CEO Dr. Joanne Conroy.

The leaders signed a letter of intent Wednesday and announced it Thursday.

Combined, the two health systems have nearly 2,500 physicians, handle more than 2.1 million outpatient visits a year and record total operating revenues of around $2.7 billion annually. The two systems already have long-standing working relationships, including Dartmouth-Hitchcock’s Norris Cotton Center on CMC’s Manchester campus.

Dartmouth-Hitchcock Health also includes New London Hospital, Cheshire Medical Center in Keene and Alice Peck Day Memorial Hospital in Lebanon.

GraniteOne Health includes Catholic Medical Center, Huggins Hospital in Wolfeboro and Monadnock Community Hospital in Peterborough. Catholic Medical Center would maintain its Catholic model of care, including not performing abortions or sterilizations.

“I am impressed with the deliberate discussions that have taken place thus far, and I believe that this combined system would strengthen Catholic Medical Center’s ability to care for the suffering and sick in our community while at the same time maintaining the integrity of its Catholic identity,” Bishop Peter Libasci, bishop of Manchester, said in a statement.

Elliot Hospital and CMC merged in 1994 to become Optima Health, only to dissolve the merger in early 1999 over several issues, including conflicts between Catholic and secular medicine.

Dartmouth-Hitchcock Health GraniteOne would benefit from lower borrowing costs for building projects.

CMC would like to add 60 to 70 more private beds, which along with other changes such as expanding its emergency room could result in an estimated $175 million project, “but none of that is in stone,” said Pepe.

Dartmouth-Hitchcock already has announced plans for a $130 million expansion at the Dartmouth-Hitchcock Medical Center in Lebanon and as well as a $59 million expansion at its Manchester clinic.

Conroy said the proposed move would help in recruiting and retaining workers. The two health care systems have about 1,000 unfilled job openings.

“That’s an advantage to keeping people in a larger system, so they can actually progress through their career within that health system,” Conroy said.

The combined entity would also provide more doctor services in-state, preventing some residents from seeking care in Massachusetts, officials said.

The announcement comes a day after Frisbie Memorial Hospital in Rochester said it will join the for-profit HCA Healthcare network. Frisbie lost $22 million in the fiscal year ending 2017, partly attributed to a new electronic health records system.

“To thrive in this changing health care environment, hospitals and health systems are implementing a range of strategies, from population health management and retail clinics to partnerships and alliances with other hospitals and health systems, with insurers and with physicians,” said Steve Ahnen, president of the New Hampshire Hospital Association.

A few years back, Dartmouth-Hitchcock held talks with CMC’s crosstown rival, Elliot Hospital, about partnering in some way, but they parted without agreement.

Dartmouth-Hitchcock also suffered a $12 million loss in its 2016 fiscal year for its main hospital and clinic, prompting layoffs.

Conroy said this week that the organization has refocused on its “core business” and is back in the black.

After the Dartmouth-Hitchcock talks failed, Elliot Hospital’s parent, Elliot Health System, formed an affiliation with Southern New Hampshire Health that officials said would provide more specialty services, increase profits and convince more people to seek care in New Hampshire. Each organization kept its name and finances separate under the new umbrella organization, SolutioNHealth.

“The plans being announced today, and the news yesterday of Frisbie Memorial Hospital potentially joining HCA, are more indications of the challenging headwinds we are all facing in health care, and the need we have all felt to find the right partner and the right strategies to best serve the needs of our community and maintain the highest quality care,” said Sherry Hausmann, president & CEO of SolutioNHealth. “SolutioNHealth remains focused on expanding access to services which improve the health of people in our region.”

Pepe said the CMC-Dartmouth-Hitchcock proposal is stronger than an affiliation.

He also said he would like to proceed with plans to team up with Massachusetts General Hospital and a few others to occupy a medical office building offering specialty services in the new Tuscan Village in Salem, but no deal is finalized yet with developer Joe Faro.

CMC, he said, would fare worse in five years if it didn’t pursue combining forces.

“Without a doubt, we would be under more financial stress,” Pepe said. “I would also say that patients will get less care in New Hampshire, and I would say that some of the rural hospitals over the years, maybe not five, but over the years could close their doors or be bought by a for-profit organization from a state other than New Hampshire,” Pepe said.

Approvals are needed by the charitable trusts unit in the state Department of Justice as well as the U.S. Federal Trade Commission.

mcousineau@unionleader.com