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Crouse, Upstate hospitals bail on merger plans

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Crouse Health and Upstate Medical University have mutually decided to terminate their acquisition agreement, according to an administration email sent to staff on Thursday. The Certificate of Need to the New York State Health Department was also withdrawn.

While the email suggests that the belief remains that a combined Upstate and Crouse would “better serve our community,” it states that because 2022 was even more difficult for the hospitals than the pandemic, it was time to pause the process and focus on “affiliation strategies.”

The discussion to merge hospitals began in April 2020 at the request of Crouse, according to the email. CNY Central reported in April 2022 that the hospital submitted a Certificate of Need, but they hit a complication in October of 2022 when the Federal Trade Commission opposed the merger, saying it would lead to “higher health care costs, lower quality and less access to care, and depressed wages for area hospital workers.”

Upstate President Mantosh Dewan wrote the letter, which said the hospitals have signed an affiliation agreement to create a platform for future collaborations. Helipad use, cord blood banking, and the Regional Perinatal Center were cited as examples already in action.

“This is not the outcome we anticipated when we started down this road, but it is the prudent decision at this time and is a result of the economic and operational headwinds health care is facing, not just here in Syracuse, but nationwide,” Dewan said in a statement released Thursday. “Should circumstances sufficiently change moving forward, we will consider revising and resubmitting applications for a CON and COPA that would authorize Crouse Health to become a division of SUNY Upstate Medical University. In the meantime, we look forward to working with Crouse under the affiliation agreement.”

The two medical facilities are among the largest employers in Syracuse, and the decision is likely to have significant impacts on healthcare provision in the region.