Stellaris Hospitals Break Up.
Breaking Westchester Health Care News: As reported in The Journal News earlier. A Stellaris Hospitals Break Up is planned; Phelps, Lawrence, Northern Westchester and White Plains may form new alliances. Stellaris had been in the news in recent years with down to the wite negotiations with Empire Blue Cross Empire & Stellaris Reach Pact effective 8/1/10.
A Stellaris Hospitals Break Up is not surprising. This is viewed as possible strategic move for acquisition form larger local hospitals or even national chains such as Cardinal Health or HCA. Insurers have also purchaszed recenlty medical groups,see UnitedHealthcare Buying Medical Groups? Will it our market allow an Insurer to purchase a Hospital?
4 hospitals seek to cut Stellaris ties
By Jane Lerner
Four hospitals in Westchester County want to cut ties with their parent organization — a move that could signal their interest in forming new consolidations and alliances with other health-care facilities.
Phelps Memorial Hospital Center in Sleepy Hollow, Lawrence Hospital Center in Bronxville, Northern Westchester Hospital in Mount Kisco and White Plains Hospital are seeking to leave the Stellaris Health Network.
“Stellaris and its member hospitals made this decision after a lengthy strategic review that evaluated a variety of alternatives to respond to a dynamic and ever more challenging health-care environment,” Stellaris said in a statement.
The state Department of Health has to approve any change in ownership of a hospital. Requests from the four hospitals to “dis-establish” Stellaris as “active parent and co-operator” were filed with the state last week.
Leaving Stellaris will enable each hospital to seek new partners.
“By becoming independent, each hospital can move forward in the direction that each feels is best for its community,” said Arthur Nizza, who is on his way out as president and chief executive officer of Stellaris.
All four hospitals declined to comment.
As the parent organization of the four hospitals, Armonk-based Stellaris handled their negotiations with commercial insurance companies, purchasing and information technologies.
Stellaris will continue to provide IT support and some other services to the hospitals. But once they leave the network, they will be able to seek new partners to increase their bargaining power and share services and expenses.
Numerous hospital consolidations and mergers are taking place nationwide.
“I think in time — not immediately — the idea of a freestanding community hospital is going to be passe,” said Kevin Dahill, president of the Northern Metropolitan Hospital Association, an industry group.
Sound Shore Medical Center in New Rochelle and its Mount Vernon Hospital are seeking to merge with Montefiore Medical Center in the Bronx once the Westchester County institutions emerge from Bankruptcy Court. In New York City, Mount Sinai Medical Center and Continuum Health Partners, a network that includes Beth Israel and two St. Luke’s-Roosevelt campuses, agreed last week to merge.
“Hospitals are doing what they have to do to position their organizations,” Dahill said.
Stellaris was formed in 1996 as an alliance between White Plains and Northern Westchester hospitals. In 1997, Phelps and Lawrence joined and, in 2000, the company formed an emergency medical service to provide paramedic service to part of Westchester.
Nizza will become CEO of St. Francis Hospital and Health Centers in Poughkeepsie next month. Sharon Lucian, who has been with Stellaris since 1999 and is vice president and chief financial officer, will replace him.