On Friday morning, Andrew Mitchell, PBMC Health’s president and CEO, held one of his organization’s regular “town hall meetings.” The sessions, open to the health care system’s 1,300 employees, are meant to give insiders a glimpse into what’s going on at the former Central Suffolk Hospital, headquartered at the intersection of Route 58 and Roanoke Avenue.
But Friday’s session wasn’t the average town hall meeting. Rumors had started to spread. Whispers had begun to circulate.
Dr. Richard Kubiak, the hospital’s chief medical officer, couldn’t even get into the room.
“It’s amazing how — I don’t even know how word gets out,” said Sherry Patterson, chair of PBMC’s board of directors. “I went to the gym at 6 a.m. Friday morning and people were congratulating me. I don’t even know how they found out.”
What “they” had “found out” was that PBMC Health plans to merge with the North Shore-Long Island Jewish Health System, the 14th-largest health care system in the United States, a country that spends far more money on health care than any other. According to the Organization of Economic Cooperation and Development, the U.S. spent 16.2 percent of its gross domestic product on health care in 2012; the second-ranking Netherlands spent 11.8 percent.
“There was a real sense of excitement in the room that we’re off to really becoming what we’ve always wanted to be,” Mr. Mitchell said.
After two years of talks with both North Shore-LIJ and Stony Brook Medicine, the Riverhead hospital’s board of directors voted unanimously last Thursday night to merge with the former, ending months of speculation.
The merger comes at a time when smaller hospitals are increasingly joining wider networks as they look toward the future. In January, Southampton Hospital — also a member in the soon-to-be-defunct East End Health Alliance — announced it would merge with Stony Brook. The East End Health Alliance’s third member, Eastern Long Island Hospital in Greenport, plans to decide by May which of the two larger organizations it will join.
North Shore-LIJ employs over 50,000 people and comprises 19 hospitals from Bay Shore to Staten Island to Westchester County, two of which were added just last fall. In addition to its medical facilities, the system also runs its own health insurance network, CareConnect.
According to Mr. Mitchell, the move will give PBMC resources — not to mention funding — it hasn’t had in the past, allowing it to provide improved care to the 220,000 people in its service area.
“My mantra since 2001 has been, ‘How do we convert this into a regional medical center that has all of the major services that the population that lives here needs?’” he said Monday morning in an interview at the News-Review’s Mattituck office. That population, according to United States census records, is aging — and increasing.
In 2000, for instance, Riverhead’s population of 27,680 included 5,107 seniors, and residents’ median age was 40.6. A decade later, the town’s population had risen to 33,506, the median age was up to 44.1, and the senior population had risen by nearly 1,400.
Seniors, Mr. Mitchell said, need an increased amount of medical services, including cardiac care, cancer treatment and joint replacements.
“So the board only had one thing to look at,” he said. “If we are going to partner with someone, who is going to bring the best advanced services to the community? Who is going to guarantee them? And quite frankly, who is going to put up the money to bring them in?”
Hospital officials said that considering those factors made North Shore-LIJ the clear choice. Ms. Patterson said the health care system has five years to fulfill its promises, during which PBMC’s current board members will remain in place. If it delivers, she said, PBMC Health will be turned over entirely to North Shore-LIJ. At that time, PBMC’s board of directors would take on a more advisory role, she said, though it would still have “some kind of autonomy.”
The specific terms of the agreement and the improvements that will result have not been disclosed, but Mr. Mitchell described it as a “multi-million dollar” deal. According to North Shore-LIJ spokesman Terry Lyman, once the terms are finalized on the state and federal levels, locals can expect to see additional services resulting from the merger “within the next year or so.”
The new affiliation is expected to provide benefits that even the hospital’s leaders freely admit would likely have been unattainable a decade ago. At that time, the officials say, PBMC was not the attractive acquisition it is today. For example, Mr. Mitchell told the News-Review in 2003 that the hospital’s emergency room was “quite crummy.”
On Monday, he pointed to the ER’s turnaround as one of the pivotal moments when the hospital started to become a more valuable potential asset for a larger system. Other highlights, he said, included revamping the hospital’s IT system, upgrading its joint replacement program, finding Wall Street buyers for $50 million in what were at the time “junk bonds” and launching the PBMC Foundation, which has raised another $50 million. A new ambulatory campus built in Manorville in 2013, for example, was paid for through a $5 million gift.
Pointing to the decision to float bonds in the mid-2000s despite the hospital’s shaky finances, Ms. Patterson said, “If you build it, they will come.”
Which leads back to North Shore-LIJ. Headquartered in Great Neck, the health system’s decision to expand into Eastern Long Island hasn’t been welcomed by everyone — especially state Senator Ken LaValle (R-Port Jefferson), who is arguably Stony Brook’s most vocal East End advocate and after whom the college’s football stadium is named.
In a prepared statement released Monday, Mr. LaValle pointed to a 2006 report by the state’s Commission on Health Care Facilities, which called for a “single unified” health system among Suffolk’s eastern hospitals, closing St. Charles Hospital in Port Jefferson — which remains open — and consolidating all the remaining hospitals under the auspices of Stony Brook Medical.
“I believe it is the right decision for the people I represent who want their medical needs addressed close to home <\h>— with local leadership,” his statement read. Mr. LaValle also told Newsday that he would explore the possibility that PBMC’s agreement with North Shore-LIJ might violate antitrust laws.
Mr. Lyman pointed to the organization’s presence in Suffolk County — it runs Huntington Hospital, Southside Hospital in Bay Shore and South Oaks Hospital in Amityville — and north of New York City into Westchester as evidence that it can operate effectively outside Nassau County.
“This is how health care is evolving,” he said. “In order to really position yourself for long-term growth and long-term success, it is important to establish and broaden your presence.”
Ms. Patterson said PBMC board members made the unanimous decision to affiliate with North Shore-LIJ with “the best interests of the community” in mind.