Ellis-St. Peter’s merger pushed back, possibly to 2023; interim cooperation planned

Ellis Hospital in Schenectady is shown in October 2020.

Ellis Hospital in Schenectady is shown in October 2020.

SCHENECTADY — Ellis Medicine and St. Peter’s Health Partners are pursuing shared services and other partnerships but their planned merger is on hold for now.

Ellis President and CEO Paul Milton said Thursday he hopes and believes the merger will be completed, perhaps in 2023, but Ellis will be collaborating with SPHP in the interim as the Schenectady-based organization tries to recover from the crippling financial impact of the COVID pandemic.

Ellis Medicine’s revenue plunged from $455 million in 2019 to $402 million in 2020, and it incurred a $33 million loss for 2020.

But the need to merge into a larger organization was apparent before 2020, Milton said: Ellis is just too small to be viable on its own for the long term in the healthcare industry as it now exists.

Four years after discussions began, Ellis and St. Peter’s went public in October 2020 with plans for SPHP to absorb Ellis, which would give Ellis the advantage of being part of the second-largest healthcare system in the region. 

The proposal will need approval from state regulators and has faced suspicion from some community residents, but both medical organizations have said it was the best path forward.

Nine months later, community activists are organizing a public rally Sunday to demand transparency and public disclosure of what the two organizations are planning and how those plans would impact care at Ellis. 

SPHP is part of Trinity Health, a Catholic healthcare system bound by a 77-point U.S. bishops’ directive banning practices that violate church doctrine, while Ellis is secular and unconstrained by religious directives. 

Meeting Thursday with The Daily Gazette editorial board, Milton said he’s given repeated updates to community groups and provided as much information as he could about the incomplete and evolving process of merger negotiations.

Michelle Ostrelich said Thursday she disagrees, and said Ellis is not being transparent with the community it serves. 

Ostrelich is a county legislator and head of the Legislature’s Health and Human Service Committee. She wants to see written guarantees that Ellis will continue services post-merger. She and like-minded organizers of the Schenectady Coalition for Healthcare Access are concerned that services will be cut, particularly for women and marginalized members of the community.

The coalition is organizing the rally at 12:30 p.m. Sunday outside the county office building on State Street to make that point.

Some services will be cut for economic reasons, Milton said, mentioning the dental clinic and home health service Ellis recently decided to eliminate.

He acknowledged that in a merger with SPHP, Bellevue Woman’s Center — Ellis Medicine’s hospital dedicated to obstetrics and gynecology — would have to stop performing abortions. (About 50 a year are performed there now.)

Milton also said discussions are underway about a physician agreement that would have SPHP employ and/or manage Ellis’ medical providers. It could be an interim collaboration before a merger is attempted. 

Those 150 or so doctors, physician assistants and nurse practitioners would be bound by religious guidelines that SPHP follows, but they’re not involved in restricted procedures such as abortion, he said.

End-of-life care and care for the LGBTQ community have been cited by those raising alarms about the merger, but the most frequent concern is diminished access to reproductive care for women in Schenectady County.

The absorbing entity often has control over this. 

St. Mary’s Hospital in Amsterdam took over Amsterdam Memorial Hospital and imposed the U.S. bishops’ Ethical and Religious Directives. St. Clare’s Hospital became part of what is now Ellis Medicine and religious constraints were lifted. Samaritan Hospital in Troy became part of St. Peter’s Health Partners and the directives took force.

Medical services are redundantly available in the Capital Region, Milton said, and if Ellis discontinued a practice or procedure, there are other sources within the community, Milton said. By way of example, he said there are several other home health care providers and a good community dental clinic run by Hometown Health that will be able to provide the services Ellis is discontinuing.

If abortions are no longer available at Bellevue, they’ll still be available at Planned Parenthood, he said.

Asked if he thinks women are adequately served with reproductive care in Rensselaer County — where all hospitals now operate under religious directives — Milton said he does.

Milton was essentially saying that Ellis has stopped providing some services to the community and is willing to sacrifice some other services in order to remain effective in its overall mission as the source of healthcare for the city and county.

The new partnership with Roswell Park Institute will be a major step forward for cancer care at Ellis, he said, and the merger with St. Peter’s would be a similarly large step forward for the entire institution, giving it greater resources and making it better able to recruit physicians.

In a written statement last week, the Schenectady Coalition for Healthcare Access acknowledged there are significant challenges to the long-term survivability of independent community hospitals, both in Schenectady and across the nation.

The problem with Ellis, it said, is that it isn’t providing enough detail about what it is doing or considering doing to address that existential threat.

Milton disagreed, calling his meeting with The Daily Gazette Thursday and the many community briefings he has provided in the last several months an attempt to be transparent. 

Milton first proposed meeting with The Gazette two months ago, and when it was held Thursday, he provided a significant level of detail.

Official comment by Ellis has been less detailed, however.

After the rally was announced July 12 and accusations of secrecy by Ellis were leveled, the hospital issued a short statement referring to a “joint affiliation agreement” with SPHP rather than a “merger.”

The statement said, in part: “We look forward to providing our community with an update as soon as we have something meaningful to report.”

An Ellis Medicine spokesman said Thursday the organization plans to engage the community in the process in the next few months. It hasn’t thus far because any agreements are still a work in progress.


Ellis’s Milton also gave The Gazette an update on aspects of Ellis operations other than the planned merger, including:

  • The merger has been delayed because Ellis lost so much money in 2020 — revenue dropped more than $52 million from the year before and Ellis ended 2020 with a $32.99 million loss, according to its consolidated financial statements. SPHP wants Ellis to regain its footing before going through with the merger, Milton said, and he strongly believes that Ellis will rebound to pre-pandemic revenue levels. Ellis has received a $9 million federal grant and a $37 million federal loan to help bridge the gap.
  • Ellis was recently down to zero COVID-positive inpatients for a few weeks, for the first time in 14 months, but now has two such patients and is preparing for a potential uptick in COVID infections.
  • Ellis’ medical staff is 89% vaccinated; the chief medical officer and chief nursing officer will make a recommendation soon about whether the hospital should mandate that all employees be vaccinated.
  • Ellis is considering the sale of its 18-acre McClellan Street Health Center, and with it the 82-bed nursing home it operates. The former St. Clare’s Hospital campus has much more space than Ellis needs.
  • In the event of a merger, Ellis would not fold its pension fund (which is federally insured) into the CHE Plan, the uninsured pension fund maintained by SPHP’s parent corporation. The issue is a sensitive one in Schenectady, where more than 1,000 former St. Clare’s Hospital employees lost pension benefits when St. Clare’s uninsured pension fund went insolvent. The Ellis pension fund was frozen — benefits were locked in place and won’t increase — more than a decade ago. The fund is overfunded to the extent that Ellis is considering selling it to an insurance company, where it would remain federally insured.
  • Ellis might see better insurance reimbursement after the merger into a larger organization, but Milton doesn’t know that yet.
  • The number of support personnel at Ellis might be reduced after a merger, as a cost-cutting efficiency move, but that isn’t known yet.

Categories: Business, News

One Comment


It looks like Ellis and Trinity/St. Peter’s are trying to achieve all the “benefits” of a merger without going through the close scrutiny a formal merger receives. The result is a clear reduction in competition between two directs rivals, hurting patients the most, but also physicians and other health care providers, and insurance companies. See my Guest Column from last Saturday, July 17, 2021, at C6, “Ellis Merger Could Hurt the Entire Region.”

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