Hospital giants Mt. Sinai, Continuum plan to merge

March 1, 2013 By Mary Frost Brooklyn Daily Eagle
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Brooklynites still bitter about Continuum’s LICH history

In what would produce the city’s biggest hospital system, the boards of Mount Sinai Hospital and Continuum Health Partners said Thursday that they had approved a memorandum of understanding for a merger.

Dr. Kenneth L. Davis, president and CEO of Mount Sinai Medical Center, said the combination would create “economies of scale, increase efficiencies, and expand access to advanced primary and specialty care” throughout the network.

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A merger would create a system with 3,351 beds, according to WNYC. That would make it larger than the largest private hospital in the city currently, New York-Presbyterian.

While increasing efficiencies for the hospitals, large mergers like this one raise anti-trust concerns at the Department of Justice and the Federal Trade Commission (FTC). Because mergers lessen competition, prices for health care can rise to the consumer.

“The increasing consolidation of hospital markets — and the federal antitrust response to those consolidations — are issues not only of significant interest in this community, but also of national concern,” said Robert Leibenluft, FTC’s Assistant Director of Health Care, at a health forum in Michigan.

The final agreement would be subject to approval by both boards and by government authorities, and is not necessarily set in stone. In June, two weeks after Continuum announced a merger with NYU Langone Medical Center the agreement fell apart after Mount Sinai made Continuum this counter offer.

The Mount Sinai Medical Center includes both Mount Sinai Hospital and Icahn School of Medicine. Physicians and scientists affiliated with Continuum would become part of the medical school’s academic faculty. Continuum operates Beth Israel, St. Luke’s and Roosevelt hospitals.

In Brooklyn, Beth Israel runs a 212-bed community hospital on Kings Highway. Mt. Sinai operates an outpatient office offering primary and specialist care at One Pierrepont Plaza in Brooklyn Heights.

Brooklynites are still bitter about Continuum’s past affiliation with Long Island College Hospital (LICH) in Cobble Hill in 1998. After stripping the 150-year-old hospital of valuable real estate and other resources, Continuum divested itself of LICH in 2011 after SUNY Downstate agreed to acquire the hospital.

Now SUNY Downstate plans to close LICH.

The recent wave of hospital closings and mergers in Brooklyn has created a degree of chaos among patients and clinics in Downtown Brooklyn. On Friday, for example, one Brooklyn mom discovered that her daughter’s doctor, who recently changed her affiliation from LICH to Mount Sinai, no longer accepted her insurance. A staffer at Mount Sinai’s Brooklyn Heights office said she had “no idea” about the proposed merger with Continuum.

In terms of profitability hospital mergers are the wave of the future. According to Moody’s, “Given current looming headwinds confronting the sector, those hospitals left out of consolidations, especially smaller stand- alone hospitals that cannot match the financial, managerial or market access capabilities of larger multi-hospital systems, will face greater negative rating pressure going forward.”

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