Dartmouth-Hitchcock ‘Combining’ With Manchester-Based Health System

  • Joanne Conroy, CEO and President of Dartmouth-Hitchcock Health, and Joseph Pepe, CEO of GraniteOne Health, are photographed at a meeting in Manchester, N.H., on Jan. 16, 2019. The two organizations have signed a letter of intent to merge into a combined non-profit health care system, Dartmouth-Hitchcock Health GraniteOne. (Dartmouth-Hitchcock Health - Mark Washburn) Courtesy D-H

  • Dartmouth-Hitchcock Medical Center in Lebanon, N.H., as seen from the air on Dec. 9, 2017. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Charles Hatcher

Valley News Staff Writer
Published: 1/24/2019 1:00:16 PM
Modified: 1/24/2019 10:22:48 PM

Lebanon — Two of New Hampshire’s largest hospitals, including Dartmouth-Hitchcock Medical Center, will become part of one health system if a merger announced on Thursday goes through.

Dartmouth-Hitchcock Health intends to combine forces with GraniteOne Health, the health care system that includes the Manchester-based Catholic Medical Center, according to a letter of intent the two have signed. The proposal would give Lebanon-based D-H a stronger presence in New Hampshire’s more populous southern tier, where it already operates clinics and has sought to merge before.

Together, the systems would become Dartmouth-Hitchcock Health GraniteOne. The combination would include the five hospitals under Dartmouth-Hitchcock — including DHMC, the state’s largest private employer and sole academic medical center — and the three GraniteOne hospitals: Catholic Medical Center; Huggins Hospital in Wolfeboro, N.H.; and Monadnock Community Hospital in Peterborough, N.H.

“What we can do together is so much more than what we can do separately,” GraniteOne CEO Joseph Pepe said in a phone interview on Thursday.

The merger — which officials expect will not result in job cuts, but will help them to increase staffing in response to the growing health care needs of the region’s aging population — builds on clinical collaborations D-H and Catholic Medical Center already have in place, including in obstetrics, pre- and post-natal care, oncology, rheumatology, endocrinology, and critical care.

“To channel Beyoncé ... it’s time to put a ring on it,” Dartmouth-Hitchcock CEO Joanne Conroy said in the same phone call.

Under the merger — though D-H officials said they prefer the word “combination” — the various hospitals would continue to operate under their own board of trustees, and would be managed operationally by a CEO and two regional presidents, according to the nonbinding letter of intent. Conroy, who said she will be spending more time in the Manchester area, would be the CEO of the combined system and president of one region, while Pepe would be the president of the second region. Nine of the new system’s board members would be appointed by Dartmouth-Hitchcock, and six would come from GraniteOne.

The proposal still must be approved by the New Hampshire Attorney General’s Office, federal regulators and the organizations’ boards, as well as the bishop of Manchester, because of Catholic Medical Center’s religious affiliation. The review also will include conversations among current member hospitals and staff, as well as public forums, which have yet to be scheduled.

The proposal would allow for cost savings through the integration of back-end services and data sharing, Conroy said. The D-H Health system has an annual operating budget of about $2 billion, while GraniteOne has an operating budget of about $600 million.

The plan aims to “eliminate anything that doesn’t deliver value to the patient,” she said.

It also would increase patients’ access to specialty services. For example, the letter of intent the two systems released on Thursday says that the new relationship will mean that services such as pre- and post-surgical transplant care will now, for the first time, be available in southern New Hampshire.

Efforts to increase access also would extend to the small, rural hospitals within the system, which in addition to Huggins and Monadnock include Mt. Ascutney Hospital and Health Center in Windsor, Alice Peck Day Memorial Hospital in Lebanon, and New London Hospital, the CEOs said. Such efforts would include sharing clinicians and using telehealth services, according to the letter of intent.

Expanding support through telehealth services could enable more patients to stay in their local hospitals, Conroy said.

Additionally, the two organizations anticipate the new health system will be able to access capital at a lower cost, paving the way for new infrastructure investments.

“We know that even with publicly shared information right now that the combined entity will actually have very strong standing in the bond market,” Conroy said.

D-H’s planned expansions in Lebanon and Manchester will continue to move forward and will not be interrupted by the GraniteOne combination, Conroy said. D-H, last month, announced a $130 million expansion to the 396-bed DHMC in Lebanon, which would include 60 new inpatient beds, 14 new rooms in the emergency department and a 400-space parking garage.

D-H also is working on a $59 million expansion to its outpatient clinic in Manchester. That project is slated to include a six-room ambulatory surgery center, medical infusion space, pharmacy, magnetic resonance imaging, or MRI, unit and new offices, according to D-H’s September announcement of the project.

The 330-bed Catholic Medical Center also is pursuing expansion plans, Pepe said. Such plans would include adding inpatient beds, increasing capacity at the New England Heart and Vascular Institute, as well as in its emergency, surgical and operating rooms.

“Both flagship institutions are at capacity,” Pepe said.

Because these hospitals often are filled, some patients are forced to seek care outside of New Hampshire, he said.

Given the aging population, demand for both hospitals’ services are expected to increase in the coming years, Conroy said.

This would not be the first time D-H and Catholic Medical Center have attempted to join forces. In 2010, then-New Hampshire Attorney General Michael Delaney objected to a merger plan that he likened to a takeover of Catholic Medical Center by D-H. Anti-abortion activists also opposed that plan on the grounds that merging with a secular hospital could prevent the Catholic hospital from carrying out its charitable mission.

But in a summary of the letter of intenton the Dartmouth-Hitchcock Health GraniteOne website, the two systems “expressly acknowledge that maintaining and furthering Catholic Medical Center’s historical Catholic health care mission is paramount and that Dartmouth-Hitchcock Health GraniteOne will not require Catholic Medical Center to provide any programming, services or procedures that are against the teachings of the Catholic Church or a violation of the ‘Ethical and Religious Directives for Catholic Health Care Services’ or otherwise contrary to the Code of Canon Law.”

D-H services that provide contraception, fertility treatment and sterilization will not be affected by the merger, Conroy said.

Under the agreement, the bishop of Manchester will retain his leadership role at Catholic Medical Center, Pepe said.

“I am impressed with the deliberate discussions that have taken place thus far and I believe that this combined system would strengthen Catholic Medical Center’s ability to care for the suffering and sick in our community, while at the same time maintaining the integrity of its Catholic identity,” the Rev. Peter Libasci, bishop of Manchester, said in the news release.

This announcement comes following last year’s formation of SolutionHealth by Elliot Health System, which includes the 296-bed Elliot Hospital in Manchester, and Southern New Hampshire Health, which includes the 188-bed Southern New Hampshire Medical Center in Nashua.

In 2016, D-H had sought a formal affiliation with Elliot Health System, but ended those talks the following year.

Conroy previously has said that D-H Health needs to care for more people in order to level out financial risks. Such collaborations aim to help health systems find cost savings as they shift from a fee-for-service model of care to one that pays health care providers a flat per-patient fee for keeping them healthy.

“Health care delivery today also requires greater alignment among hospitals and providers in order to efficiently coordinate care, manage the total cost of care, ensure consistent quality, and improve the health of populations,” the D-H Health GraniteOne website says.

Pepe said the two organizations hope to wrap up their internal due diligence by June and complete the regulatory review by mid-2020.

Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.

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