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What’s next for Crouse Hospital now that merger is out?

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Upstate Hospital and Crouse Hospital have decided to call off their merger, leaving Crouse Hospital to find a way to survive independently after suffering from financial losses over the past few years. Upstate Hospital was set to assume about $77 million in debt from Crouse had the merger gone through, but the two hospitals have instead entered an affiliation agreement to collaborate on certain operations. Upstate President Mantosh Dewan explained in a letter to staff on Thursday that the merger plans submitted to New York State in April 2022 have been withdrawn.

Crouse Hospital experienced $33 million in operational losses in 2021, according to an audit of Crouse’s 2021 financial statements obtained by ProPublica. Crouse has nearly $77 million in loans and debts, which Upstate would have taken over. Dewan’s letter indicates that Crouse initiated the merger plan, with discussions beginning in April 2020.

Crouse Hospital spokesperson Bob Allen declined to be interviewed and did not answer questions about the hospital’s debt, but provided a statement affirming that Crouse is financially capable of meeting the needs of its patients and community. Allen stated that the hospital ended 2022 with a positive bottom line and met its debt covenants. The hospital’s 2023 budget also reportedly has a positive bottom line and continues to meet debt covenants.

The Federal Trade Commission (FTC) notified the New York State Department of Health in October that it did not support the proposed merger. The FTC opposed a request from Upstate and Crouse for a Certificate of Public Advantage (COPA), which had the potential to protect the merger from antitrust laws. The FTC argued that this would result in higher healthcare costs, lower quality of care, reduced access to care, and lower wages for area hospital workers. The FTC also stated that the hospitals did not provide significant evidence to prove that the merger was the only solution to avoid financial ruin.

SEIU Local 1199, which represents over two thousand employees at Crouse Hospital, recently approved a new two-year collective bargaining agreement that will provide raises for its members. Regional Vice President Kevin Lockhart stated that he cannot comment on Crouse’s financial stability, but is optimistic that the hospital can secure additional state and federal funding to remain operational. State Senator Rachel May, a member of the NYS Senate Health Committee, is also looking to help ensure that the healthcare system in Central New York can provide excellent care.

The pandemic has put a significant strain on operational costs for hospitals. Eric Kehoe, a paramedic with WAVEs Ambulance, believes that it is critical for Crouse to find a way to survive. Kehoe stated that there is no way that the current hospital systems could manage the volume without Crouse being in the picture.