GUEST COLUMN: Ellis merger could hurt the whole region

PHOTOGRAPHER:

If Ellis Hospital merges with Trinity Health, the parent of St. Peter’s, services prohibited at Catholic hospitals may cease in Schenectady County.

More broadly, when two of the three major health care systems in the area become one entity, the entire Capital Region could lose the benefits of vigorous competition.

Last November, the Federal Trade Commission sued to enjoin the merger of two of the three major hospital systems in Memphis.

The FTC complaint noted that the two hospitals were “direct competitors today, vying with one another for inclusion in insurers’ networks, and competing to attract patients by improving quality, expanding services, recruiting high quality physicians, and increasing access.”

The commission believes that patients would pay the price If such a merger is consummated.

The same competitive dynamic exists here.

Hospitals no longer stay within four walls or on a single campus.

They have morphed into health systems with multiple locations that include emergent and urgent care centers, acquired medical practices and specialties, laboratories, senior residences, and more.

Up to now, St. Peter’s and Ellis decided separately on investing in a new location, service or facility. They looked not just in their county, but in surrounding counties, for ways to increase revenue, better serve the community, and better compete with each other and Albany Medical Center.

People in every local community should wonder whether a broad array of medical services will be as convenient and available (location, hours, staffing, cost, quality, etc.) after the merger.

Thus, St. Peter’s has opened 11 WellNow Urgent Care facilities, in four counties, including two in Schenectady County, plus a third soon in Glenville.

All are open 8 a.m. to 8 p.m.

Ellis has an Urgent Care center at Mohawk Harbor, open 9 a.m. to 8 p.m., and an Emergent Care Center in Clifton Park, open 24/7.

After an Ellis-Trinity merger, decisions will instead be controlled by Trinity in Livonia, Mich.

Meanwhile, the slightly larger of the two remaining hospitals, Albany Medical Center, would have to worry about only one major rival across the entire region.

Once a smaller, hungrier rival has been eliminated, antitrust experience shows that the “duopolists” often get complacent and chummy.

Would St. Peter’s really make a decision primarily to eliminate a rival? Would Ellis?

St. Peter’s, as a Catholic institution, and subsidiary of Trinity Health, must obey the Ethical and Religious Directives for Catholic Health Care [“ERDS”] promulgated by the Congregation of Catholic Bishops.

The changes made to the latest edition of ERDS (6th Ed. 2018) focused on Collaborative Arrangements with Other Health Care Organizations and Providers (Part 6), and emphasizing that: “When considering a collaboration, Catholic health care administrators should seek first to establish arrangements with Catholic institutions or other institutions that operate in conformity with the Church’s moral teaching.”

ERDS added Directive 75: “It is not permitted to establish [or help establish] another entity that would oversee, manage, or perform immoral procedures.”

Indeed, the ban applies to separate entities already existing. (That may be why the independent Burdett Birth Center has recently rejoined St. Peter’s, and no longer offers tubal ligations and vasectomies.)

St. Peter’s has nonetheless sought out a secular partner that I don’t believe will be able to dodge ERDS prohibitions with spin-offs.

That means, for example, the excellent Bellevue Women’s Center won’t continue to compete with St. Peter’s.

Similarly, Ellis likely wouldn’t be able to preserve ERDS-prohibited services for its patients by creating separate entities.

Moreover, by merging with a marketplace rival, rather than an outside secular health care system, our entire region could lose the opportunity for a fresh influx of financial, medical and administrative resources.

When Ellis and Trinity merge, the reduction in competition will hurt all of us.

David Giacalone of Schenectady is a retired attorney and mediator, and a former supervisory attorney at the Federal Trade Commission, Bureau of Competition, Health Care Office.

Categories: Guest Column, Opinion

One Comment

R HOROWITZ

Thank you, David, for raising this important issue in your guest column. Your professional experience has allowed you to see this problem from another perspective and to share your insights with readers. I am grateful for your efforts.

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