Glens Falls Hospital CEO: Why Albany Med pact is a win

By Mark Frost, Chronicle Editor

The Chronicle sat down Tuesday morning with Glens Falls Hospital President and CEO Dianne Shugrue.

Last Thursday, it was announced that the boards of the hospital and Albany Medical Center have approved an affiliation agreement under which Albany Med will become Glens Falls Hospital’s parent. Glens Falls will continue as a separate entity.

Ms. Shugrue said both hospital’s boards voted unanimously for the affiliation, which she said is like the arrangement that Albany Med has established with Saratoga Hospital and Columbia Memorial.

The Chronicle asked, what does o the patients and to the community of Glens Falls?

“I think that this insures long-term health care and access to health care services in our community,” said Ms. Shugrue. “It helps this community position itself well for all the multiple changes that are occurring in the health care delivery system.”

She said, “The way people access health care is changing. Volumes [of patients seen in hospitals] are decreasing. We see disruptors coming into health care.

“Eighty-five percent of hospitals in New York State are part of a system. So I see this as all being very positive for our ability to have services here for patients.”

Ms. Shugrue also cited the “tough environment” in attracting “physicians, nurses, other clinical folks” and administrators to Glens Falls Hospital. “This is going to help us do that as well.”

Chronicle: Is there any downside?

“That’s a hard question,” she replied.

“There will still be local control over most issues,” said Ms. Shugrue. “Albany Med will have reserved powers, though, and so it is this whole ’nother layer of oversight. Yes, some people could look at that as a downside. I look at it as an opportunity to have more cooperation with sharing of services, more sharing of scarce resources, long-term access to health care in this community.”

She said, “But no doubt about it there will be changes. I can’t sit here and say what those changes are going to be. Some people might look at that as a downside. I look at it as an opportunity to still be here serving the community.”

What are Albany Med’s reserved powers? “There’s a whole list of them but some of them are they will have to approve board members. They will approve budgets. They will approve capital expenditures. They will approve the hiring and firing of the CEO, so it’s those kind of things.

Will Albany Med have a board member at Glens Falls Hospital? Ms. Shugrue said, “We will have two board members in Albany. They will have two members on our board.”

Chronicle: Will there be services that are currently provided at Glens Falls Hospital that will go to Albany Med instead?

“It’s too early to say that,” said Ms. Shugrue. “We send a lot to Albany Med now. Every day we send approximately three patients from our emergency department to Albany Med to receive services that we don’t provide. So we’ve had a long-standing relationship with Albany. They’re a good partner; that’s a plus for the community.

“I want to think that we have some capacity. The system hospitals are at capacity so they may be able to ship volume this way as well. We’ve not had those conversations because we can’t right now.”

She said the agreement needs approval from New York State Department of Health and from federal authorities under “Hart-Scott-Rodino” anti-trust legislation.

“We expect it to take anywhere from six to 12 months to get the approvals, but the actual deal is done,” said Ms. Shugrue. “There’s no going back. The letter of intent was signed, the definitive agreement was signed. Now it’s just the approvals.”

Board priorities: Access, cost, quality

Ms. Shugrue added, “It’s important to know this didn’t happen overnight. The Glens Falls Hospital Board of Governors [pursued] this process two years. We started in September 2017. We worked hard for two years trying to find the right partner, trying to do our due diligence and looking for what were the objectives of Glens Falls Hospital, and we involved the medical staff closely in this journey.

“We talked about this at the board meetings. What is the mission of Glens Falls Hospital? What is the board’s responsibility? It is, as it has always been, to ensure access to health care that is cost-effective, patient-centered, quality.”

Chronicle: Will this impact the relationship with Saratoga Hospital?

“Yes. I can’t tell you exactly how but whatever happens now at Exit 18 with Saratoga, we are together so that that’s good for this community.” Ms. Shugrue noted, though, that until Glens Falls Hospital’s agreement with Albany Med wins state and federal approval, the various soon-to-be-affiliated hospitals still can’t discuss business.

Ms. Shugrue said competing facilities coming into the market seek prime consumers with private health insurance.

“Nobody’s coming to do the work of the hospital in terms of the poor, the needy, the behavioral health. That would’ve sucked more profitable volume out of the system.”

[Note: Tuesday, Saratoga Hospital and Hudson Headwaters Health Network announced a deal to move Hudson Headwaters’ Urgent Care facility from Broad Street in Glens Falls to the building Saratoga Hospital plans to erect next to Northway Exit 18 at the former site of Carl R’s. That announcement came after this interview.]

Chronicle: Have you spoken to Saratoga Hospital? “I can’t talk to [CEO] Angelo [Calbone]. We have a very positive relationship with him but we can’t talk about this.”

Can you talk about it once it’s approved?

“We need to get this over the finish line.

“It’s not about Saratoga Hospital or Columbia Memorial. It’s about the Albany Med system and how do we come together and share resources and expertise to be able to make sure that our communities have what they need.”

Sees hospitals in jeopardy

Ms. Shugrue said, “People think that you’re going to the hospital and they’re always going to have that doctor, that specialist, available, ready for you. We have some specialists, but it’s hard to provide call coverage for some of the specialties.

“It’s a burden. It one of the things we struggle with. Is there a way that we can do things [with Albany Med]. What’s happening in your residency program? Is there any opportunity that…maybe send somebody up and they do surgery here one day a week? And when patients go to Albany Med, that once they’re stabilized in tertiary or quaternary care, send them back here? We do that with babies, neonatal now.”

Chronicle: What will be the impact of the affiliation on employment?

Ms. Shugrue said, “Albany Med does not become the employer. It stays separate the same as it is with Saratoga and Columbia. Your human resource departments do not merge. We have our own salary and benefit structures and it will remain that way.

“I expect a change in employment numbers related to what we see happening in health care in general and not related to this affiliation.”

Ms. Shugrue said, “There’s always opportunities for some consolidation of back office function, but not care givers. People that support direct patient care, we can’t seem to get enough of them as it is today.”

Chronicle: Is a hospital the size of Glens Falls no longer able to survive as a standalone? Ms. Shugrue said, “I would say yes if you think 85% of the hospitals in New York State are part of something else. I was just at a HANYS [Hospital Association of New York State] board trustee retreat last Friday, with trustees from all across the state.

“Half of the programs, half to three-quarters of everything had to do with consolidation of health care and how independent community hospitals can’t be independent any longer because of the economic pressures and the changes in health care.

“It’s probably about 70% across the nation and 85% in New York State so we’re a little ahead of the curve…”

Here come hedge funds & Amazon

“The other thing that they spent a lot of time talking about was disruptors in health care. You have these private equity firms that are coming in and buying up hospitals and buying up physician practices and leveraging that. You have CVS and Aetna, Amazon, Berkshire Hathaway.

“These are billion dollar companies and they are coming together because they are smart businesspeople who see there are a lot of dollars in health care and how do they get some of those dollars?

“Community hospitals are trying to compete with this. I think the community hospitals care about the communities they are vested in. These big companies just coming into health care don’t have the same mission. They have lots of financial backing that community hospitals don’t have, so it does make it hard because the market is changing.”

Ms. Shugrue said, “Things can be done less expensively than they can in the hospital, no doubt, and we can do things to keep people [healthier] so that they don’t end up in the hospital as frequently. But eventually people do end up in the hospital because of something in their life. Who’s going to continue funding the hospitals? That’s the challenge in health care right now for all of us in New York State and in the country.”

Ms. Shugrue said, “You keep driving volume out of our ED [Emergency Department] and everybody is celebrating. That’s good. However, we are 4,000 patients less. That’s revenue that we don’t have. I can’t close the ED for an hour on Tuesday night, so that’s the challenge that we face.”

She said that “as those revenue streams get pulled out, there’s no new revenue stream coming to support” hospitals, especially to defray costs of the Medicare and Medicaid patients for which the reimbursement rates to the hospital are inadequate.

Her bad experience overseas

“You know what I lay awake and worry about at night is our health care system in the United States of America,” Ms. Shugrue said. “Having recently been overseas and gotten ill in a country that has single-payer and see the level of care that was delivered there versus the level of care that I know is delivered in the good old United States of America. It doesn’t even compare. We are so lucky for what we have. And how do we continue to have that for our children?”

Chronicle: You mean got a lower level of care with single payer [in the United Kingdom] than you do from here?

“Much lower,” she said. “I was very ill laying on the bench outside the hospital.” She said there were so many people waiting to be seen that there was no space inside and that a sign said there would be a six-hour wait, and a provider said: “No guarantee…I will be able to see all of you tonight.”

Ms. Shugrue said that she discovered availability of “another level of care when I Googled it: a private hospital,” but it “closed at 10 o’clock every day.” They’d be available the next day “and as long as I had 1,000 [British] pounds, which is U.S. $1200,” she’d be able to be seen right away.

“I could go back to the National Health Service. I’m really sick and septic. So then I went back to my hotel and called the hotel doctor, who would come for 500 pounds. I said, can you do IV’s? No. Do you have antibiotics? No. I said, what are you gonna tell me to do?”

Ms. Shugrue said, “I’m lucky and fortunate.” She got to the private hospital. “It was like being at the grocery store, [checked off item by item] what they did and I pay for it.”

She said some people there said hospital care for the poor in the U.S. is a failure, too.

“No, it is not,” she said she retorted. “You come into the emergency department and you are treated based on your acuity [how sick you are]. It doesn’t matter what you can pay or not pay. You can be the most wealthy person, if somebody’s more acute, we take care of them.

“That’s not the way it is in the [British] system so I worry for our country.”

Albany Med: Smart, good people

“What is going to become of our health care system, because it has to change, it is changing around us, which is why I am so excited, relieved and optimistic that we are going to be part of a bigger system, which is a good organization run by smart, good people, with great quality that we have worked with for years.

“I know I want to be there the day that we are able to put up in bright lights under our name, ‘An affiliate of Albany Medical Center’ and let everybody know that I think this is a good thing for our community.”

Chronicle: Final question. You said it could impact back office. Does Albany Med use Cerner [technology system provider]?

Ms. Shugrue: “Oh, you crack me up.

“Albany Med, Saratoga and Columbia are on three separate systems. They need to do what we’ve already done — invest in a system and typically it comes down to two major systems — Cerner and Epic….

“I don’t know that they’ll end up with Cerner, I don’t know that they won’t.”

She said, “A whole group from Albany Med came up and looked at our Cerner system. It was very honest,” about Glens Falls Hospital’s successes and problems.

“The revenue cycle conversion was difficult,” says Ms. Shugrue. “The clinical conversion” was smooth. “The computerized clinical systems, they’re pretty awesome.

The revenue cycle problems led to a shortfall in the tens of millions of dollars. (The Hospital and Cerner reached a subsequent settlement; it is not publicly known how much of the loss was mitigated.)

“We had a bad 2017, over a little bit into 2018,” said Ms. Shugrue. “But our revenue cycle is solid [now] so I think personally I hope that the system [they choose] is Cerner because we are already there.

“We would be the leader in there and I don’t want to have to change systems, but I’m sure that the best decision will be made. That’s not imminent.”

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