UPDATED: Holy Spirit, Geisinger to affiliate
Geisinger’s strength is using its provider and insurer networks in concert, Geisinger President and CEO Dr. Glenn Steele Jr. said, and that’s what it intends to do at Holy Spirit Health System.
Harrisburg-based PinnacleHealth System just opened a new hospital in Cumberland County near Holy Spirit Hospital, and when asked about that, Steele said, “We have a different business model. We’re basically interested in keeping people healthy and out of the hospital.”
“We really feel the market will be overbedded with the new beds (at West Shore Hospital),” added Frank J. Trembulak, Geisinger executive vice president and chief operating officer.
Steele noted that he joined Geisinger about the time it was wrapping up an earlier failed merger with Hershey Medical Center.
“That didn’t work, as you know, so we’re doing the experiment again but under different circumstances,” he said. “The most important aspect is we understand each other’s cultures, and the second is the structure of the relationship is fundamentally different. The times externally are demanding higher quality for lower cost. Fifteen years ago, it was still a free-for-all that was based on fee for service.”
Steele and Trembulak said they were among a number of organizations, both non- and for-profit, that responded to a request for proposals from HSHS. The proposed affiliation is essentially the same as the one Geisinger is pursuing with New Jersey-based AtlantiCare, they said, and both are fundamentally different from Geisinger’s other recent mergers because the local boards will retain fiduciary responsibilities.
“Their board is responsible for their operating plans and meeting that operating plan,” Steele said. “Their board will work with the Geisinger Foundation Board to develop long-range models that are both strategic as well as financial. Their board will be responsible with me for the performance of the HSHS CEO.”
11:30 a.m. update: Catholic authorities including Bishop Ronald W. Gainer of Harrisburg and his counterpart in the New Jersey diocese that represents the Sisters of Christian Charity have approved Holy Spirit Health System’s plans to become an affiliate of Geisinger Health System.
“We’re in solid ground with the Catholic church,” said Sister Romaine Niemeyer, Holy Spirit president and CEO. “We will retain our Catholic identity and the sponsorship of the Sisters of Christian Charity.”
Going forward, she added, there will be continued audits to make sure that HSHS is living up to church standards.
“Everyone served by Holy Spirit should continue to expect the same or improved access to service, and the familiar caring and competence and quality for which we have become known,” Niemeyer said.
Geisinger, she noted, is known nationally for its information system and population health management, and HSHS looks forward to the benefit of that experience moving forward.
“I think we’re gaining something in affiliating with Geisinger, and it will only make us stronger,” she said.
Asked about the regulatory review process, she said Geisinger is not directly in the HSHS market, so no antitrust issues are expected.
Nine months after announcing they were exploring the possibility of a strategic affiliation, Holy Spirit Health System and Geisinger Health System said today that their boards have signed a definitive agreement for Camp Hill-based Holy Spirit to become an affiliate of Danville-based Geisinger.
The proposed integration agreement still needs regulatory approval, which the organizations said they expect to take 30 to 45 days.
Representatives from each organization will sit on the Geisinger Health System Foundation and Holy Spirit Health System boards of directors.
“This affiliation with Geisinger will enable us to build upon our efforts to deliver innovative and collaborative medical services to the community, as well as to maintain our mission-driven Catholic identity,” Sister Romaine Niemeyer, Holy Spirit president and CEO, said in a news release. “We will continue to benefit from the expertise of our local board of directors and the sponsorship of the Sisters of Christian Charity, as well as Geisinger’s nationally recognized accomplishments.”
“This is an important step forward for Geisinger and Holy Spirit to enhance care in south central Pennsylvania,” said Geisinger President and CEO Dr. Glenn Steele Jr. “Holy Spirit has a 50-year history of providing high quality, compassionate care, and we are pleased to affiliate with an organization that shares our commitment to value and doing what is right for patients and the community.”
In the late 1990s, Geisinger had a short-lived and unsuccessful merger with Penn State Hershey Medical Center. In the past few years it has been forming a number of new relationships, including the following:
- In November, it acquired Lewistown Hospital in Mifflin County, and in May Steele wrote a letter summarizing the first six month of operations there.
- In April, it announced the signing of a comprehensive integration agreement to make SUN Home Health & Hospice part of Geisinger. The home health and hospice provider serves 14 counties, including Perry and northern Dauphin, and pending regulatory approval, the agreement’s effective date will be July 1.
- In May, it announced progress on a merger with Atlantic City-based AtlantiCare health system; the organizations estimate that state regulatory approval will take nine to 12 months.
When initially announcing the proposed Holy Spirit affiliation last year, Steele said this was quite different from other recent deals because Holy Spirit was flourishing, not struggling, and that would be reflected in the structure of the deal. Not a merger, it would leave Holy Spirit with local control while still working closely with Geisinger, the parties said.
In the news release today, Steele said, “As the healthcare delivery system in the United States moves toward a value-based model, we look forward to working together to implement evidence-based medicine programs, enhance capabilities, facilities and clinical services, and improve population health in the Harrisburg community.”
The release also noted that Holy Spirit participates in the Geisinger Health Plan provider network.
Geisinger Health System serves more than 2.6 million residents throughout 44 counties in central and northeast Pennsylvania. The physician-led system has more than 21,000 employees,including a 1,100-member multispecialty group practice, eight hospital campuses, two research centers and a 467,000-member health plan.
Holy Spirit Health System serves southcentral Pennsylvania with more than 2,800 employees and more than 500 physicians on the medical staff of its flagship Holy Spirit Hospital. The health system also provides inpatient and outpatient services across the continuum of care, including acute care, home health, emergency medical services, physician practices and outpatient facilities.
Check back for more details as this story develops.