Ellis Medicine and St. Peter’s Health Partners announced Tuesday that they will form a new regional alliance designed to deliver better, more efficient care to patients at a lower cost to the overall health care system.
The alliance is what’s known as a Clinically Integrated Network, or CIN, a partnership among physicians, hospitals and health systems who have committed to work together in coordinating care that is reimbursed based on its overall value to the patient — a shift from traditional fee-for-service health care models that reimburse providers for each individual service they perform.
“To further meet the challenges of health reform, the boards and senior leadership of both Ellis Medicine and St. Peter’s Health Partners have been in discussions to explore how the two systems might further collaborate,” said Ellis Medicine President and CEO James Connolly. “Our two respective systems aim to be leaders in transforming health care and reining in uncontrolled health care costs.”
Clinical integration is an emerging trend in some areas of the country. At its essence, it allows health care providers to work together to pool infrastructure and resources, and develop, implement and monitor best practices. Patients get better care this way and physicians can enhance revenue through better management of chronic patients, who account for most of the cost to the health care system, proponents say.
Similar collaborations have been happening locally in more informal ways. Last month, Glens Falls and Saratoga hospitals announced they would begin exploring opportunities for collaboration. A week later, Albany insurer CDPHP and Buffalo insurer Independent Health announced they were forming a strategic alliance to share best practices and expertise, partner with physicians, invest in new technology and develop new products.
But none of those involved new legal entities. At a minimum, the newly formed CIN gives Ellis and St. Peter’s and other partners in the alliance the legal ability to capture a piece of $8 billion the state plans to dole out over the next five years as part of the federal government’s Medicare Shared Savings Program.
Ellis Medicine, based in Schenectady, and St. Peter’s, based in Albany, are both large players in the Capital Region health care market. In the past several years, Ellis has taken on the services and responsibilities of three hospitals while St. Peter’s ballooned through the merger of Seton Health, Northeast Health and St. Peter’s Health Care Services, the parent company of St. Peter’s Hospital in Albany.
At a news conference Tuesday morning at Ellis Hospital, both Connolly and St. Peter’s President and CEO Jim Reed emphasized that this collaboration is not a corporate merger and that their respective organizations will remain independent of each other. But the CIN does allow the two systems to cooperative on clinical, business and financial initiatives.
“St. Peter’s Health Partners and Ellis Medicine both have legacies of leadership and innovation in developing and implementing collaborations that improve access to, and the delivery of, quality health care,” said Reed. “This is an exciting initiative that carries a tremendous amount of potential for the future of health care in our region.”
To oversee the new alliance, the governing boards of Ellis and St. Peter’s voted in January to create a new limited liability company called Innovative Health Alliance of New York. The organizational documents for the company were filed with the secretary of state last month.
The company is the first of its kind in the Capital Region. Ellis and St. Peter’s hope that private physicians groups, other health providers and other health systems will eventually join them in the alliance. Discussions are already underway with St. Mary’s Healthcare in Amsterdam, which has expressed a desire to join in the regional alliance.
When asked whether Albany Medical Center had any interest in joining the alliance, a spokeswoman for the hospital issued the following statement:
“The stated intention of St. Peter’s Health Partners and Ellis Medicine to jointly participate in reform initiatives is part of a nationwide trend. Health care organizations across the country are working to benefit from incentives being offered by the federal and state government for reducing costs. Similarly, Albany Medical Center is working with dozens of partners throughout the region on initiatives aligned with the Medicaid waiver program that will improve care in a broad geographic area.”