Date: 7/9/2010 12:00:00 AM

Update on Clearfield Hospital, DRMC potential affiliation

     With a mission statement focused on improving regional access to a wide array of premier primary care and advanced services while supporting a reverence for life and the worth and dignity of each individual, a group of leaders from Clearfield Hospital and DuBois Regional Medical Center are working toward the creation of a linked organization.

     The hospitals announced Friday that both individual boards of directors have ratified a letter of intent that will allow the linkage group to move forward and seek legal and regulatory approval to the formal linkage between the two hospitals.

     The two hospitals announced in November 2009 that they were meeting to discuss the possibilities of a formal partnership that would allow both hospitals to work together to “secure, enhance and expand” healthcare throughout their primary service areas and beyond.

     A group of administrators, physicians and board members met nearly each week during the last six months with a well-respected consulting firm to develop a structure that would be agreeable to both hospitals and best serve the respective communities.

     “After several months of intense discussions and negotiations, there is little doubt that the benefits of a linkage between DRMC and Clearfield Hospital are numerous. We believe that coming together will elevate patient care and be a win-win situation for the residents of this region. We’re all very excited about the possibilities this agreement will create for the community,” stated Dennis L. Merrey, chairman of the Clearfield Hospital Board of Directors and a member of the negotiations team.

     The updated information released Friday outlines a tentative corporate and management structure that involves the creation of a parent company that would be over DRMC, Clearfield Hospital and Brookville Hospital (a subsidiary of DRMC). Raymond A. Graeca, President of DRMC, would take the helm of the proposed parent corporation.

     This corporation would also have a board of directors that would be made up of representatives, including physicians, from each of the hospitals. Merrey would serve as chairman of the parent board.

     If given regulatory approval, a new parent corporation and board of directors would oversee joint efforts in such areas as expansion of services, acquisition of resources and operational efficiencies that would benefit both hospitals.

     Each hospital in the system would retain its name, community base, medical staff and board of directors. Past and future community donations designated for each hospital would remain in that hospital’s control and used according to the donor’s wishes.

     Officials said that the process now shifts into what is called due diligence, a full disclosure by both hospitals that looks deeply into the financial, operational and contractual activities and obligations of each entity.

     “This is important to both hospitals,” DRMC Board Chairman Scott Foradora said. “This is a common business practice that will allow the hospitals to correct any issues before creating liability for the other hospital. This is typically a formality and we don't expect anything unusual to surface.”

     Regulatory approval could be sought as early as August. Officials from both hospitals said that regulatory approval could take from six months to a year.

     According to hospital officials, many hospitals throughout Pennsylvania and the nation are seeking these types of links with their neighbors to help maintain a high level of care and financial stability. The recently passed 2,000-page healthcare bill, which contains mandates such as requiring hospitals to have an electronic medical record by 2014, will cost hospitals millions of dollars.

      “Hospitals are choosing to strengthen their prospects for the future by linking with organizations with similar interests in their region. With the uncertain financial climate in today's healthcare world, both hospitals needed a way to make sure they would not only continue the traditions of providing high-quality healthcare to the regions they serve but to build upon those traditions,” stated David J. McConnell, president and chief executive officer of Clearfield Hospital.

     Potential benefits of an affiliation include the ability of both hospitals to recruit physicians and other clinical professionals to the region, as well as improved access to specialists for local residents.

     Merrey emphasized that members of the new hospital system will maintain local hospital boards that will continue to focus on the healthcare needs of their local communities.

    “I believe that the linkage between Clearfield Hospital and DRMC provides us with the best opportunity for securing, enhancing and expanding healthcare in this region. Our roots are firmly planted in our hometowns, and we want the very best for our families, friends and neighbors. We want the community hospitals that we have always relied upon to care for our families to be strong and stable for generations to come,” he said.