Community Hospital seeks partner

Published 12:09 pm Friday, June 4, 2010

WATERVLIET – After months of careful consideration and analysis of the hospital’s operations, the board of trustees of Community Hospital Watervliet (CHW) Thursday announced it will evaluate a number of options for future growth, including a possible affiliation with a strategic capital partner.

Like many hospitals across the country, CHW has faced challenges in recent years, including declining volumes, shrinking reimbursements and rising numbers of uninsured patients.

As a result, the hospital has deferred capital investments needed to grow and attract new patients.

Following a thorough examination of area economic trends as well as an assessment of CHW’s future needs, the board has issued a Request for Proposal (RFP) to seek the interest of qualified and appropriate strategic partners.

“While the hospital continues to thrive in many areas, we must plan for the future to insure that our community continues to have access to high-quality, local health care services,” said Joe Barrett, chairman of the CWH board of trustees. “After thoughtful evaluation, we believe one option that merits consideration is the identification of a capital partner with the resources, stability and expertise to help us grow and insure the continued presence of a strong local health care provider.”

The decision to issue the RFP follows a more than two-year review of the hospital’s strategic operations.

Most recently, CHW undertook a year-long financial recovery plan, which resulted in the reduction of more than $1.2 million in expenses and significant growth in key service areas.

In addition to growing outpatient rehabilitation volumes by more than 25 percent, CHW engineered a financial turnaround for its inpatient rehabilitation unit – more than doubling volumes and reversing a financial deficit.

Despite these improvements, additional resources are needed to keep pace with evolving medical technologies and to fund renovations and expansions.

The current facility, built in 1978, is in need of additional emergency room space, private patient rooms and other upgrades to its physical and information technology infrastructure.

Like many stand-alone hospitals, CHW does not have the same advantages available to larger organizations that can leverage their volumes for physician recruitment, managed care contracting and synergies around clinical and information technology systems.

“We’ve considered the possibility of continuing with the status quo but believe that our best option for long-term growth and success is to secure support from a strong capital partner,” said Ray Cruse, CHW’s chief executive officer. “By affiliating with a strategic partner, we can operate much more efficiently than is possible as a stand-alone provider. In addition to allowing us to leverage economies of scale, we will have improved access to capital and other resources and expertise.”

The RFP will be sent to a variety of organizations and will seek to assess potential partners’ interest in a merger, joint venture opportunity or acquisition.

Formal responses are due by July 31. A final decision is expected by October 2010.

“While this is only the beginning of a dialogue about our hospital’s future, we take our responsibility to the community very seriously and we want to proceed in a measured and thoughtful fashion,” said Barrett. “We are willing to consider any arrangement that will allow for the continued provision of high-quality health care services in a local setting.”
Despite financial challenges it faces, CHW continues to provide outstanding care.

In addition to completing a successful Joint Commission survey last year, the hospital maintains high patient satisfaction – consistently exceeding state and national averages.
In addition, CHW has been recognized for its efforts to improve quality and patient safety with the Governor’s Award of Excellence for Improving Care in the Hospital Setting for three consecutive years.

Community Hospital Watervliet is a 58-bed, acute care facility.

Founded in 1949, the not-for-profit hospital provides a wide range of services, including emergency care, inpatient and outpatient rehabilitation, orthopedics, radiology, laboratory and inpatient and outpatient surgery.