Ge Bai, an accounting professor at Johns Hopkins University who specializes in health care pricing, policy and management, agrees there usually is a “tipping point” when the decision is made to merge. “I think Excela is in a better position now than it would have been if we would have continued to compete as individual hospitals,” said Douglas Clark, former CEO of Latrobe Hospital, who also served as Excela’s president. In the next fiscal year, the merged system posted a $4.4 million profit, those forms show. hospitals expand, fears grow over higher health care costsĪs the merger was being completed in 2004, all three hospitals were losing money - Westmoreland and Frick had combined losses of $9 million, while Latrobe had $4 million in losses, according to disclosure forms. “There are a lot of challenges … but that’s the idea behind it: that you have the ability to maintain these community-based systems and compete where appropriate,” Driscoll said. Pleasant - merging with Latrobe Area Hospital. “The idea of mergers of community-based hospitals is partly driven by the need to be able to leverage all of those assets together and be able to borrow money, to buy supplies and make capital investments at lower rates and to have the benefits of a larger system,” said retired Westmoreland County Judge John Driscoll.ĭriscoll was a board member as Excela Health was formed in 2003-04, the result of Westmoreland Health System - which operated Westmoreland Regional Hospital in Greensburg and Frick Hospital in Mt. Since then, WVU’s presence in the county has continued to grow with more practices and widespread television advertising urging patients to utilize its new pediatric hospital in Morgantown, about 25 miles from Uniontown.
Excela Health and Butler Health inked an intent-to-merge agreement this past summer.With every health system attempting to grab its share of patients, four recent significant mergers have occurred in the region: In this region, those problems have been amplified as UPMC and Allegheny Health Network continue to spend billions of dollars to broaden their presence and West Virginia University Health System stretches across the Pennsylvania border to grow its footprint in Fayette County. We have no desire to be the biggest, just the best in what we do.”īut Sphon and other executives at smaller health care systems have realized the path to being “the best” might require merging with similar systems to overcome challenges such as rising labor costs, decreasing inpatient admissions and ongoing fallout from the covid-19 pandemic. That focused use of capital, one that is motivated by what is in the best interest of our patients and their families, is what drives us. “We will, however, compete on the field of quality of care. “We will not compete on a field measured by expansion. “We have no desire nor intent to enter into a health care arms race with UPMC or AHN,” Sphon said. He believes the alliance will ensure the system is a viable, long-term player in a highly competitive health care market, but he said it’s not an attempt to battle Western Pennsylvania giants UPMC or Allegheny Health Network.
#BUTLER HEALTH SYSTEM MERGER SERIES#
Editor’s note: This is the second part of a three-day series examining the rapidly changing health care landscape in Western Pennsylvania.Īs Excela Health CEO John Sphon irons out the details of a merger with Butler Health System, his message to the public is clear.
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