SUNY Board Delays Vote On Hospital Partnership

The Board of Trustees of the State University of New York last week once again postponed a vote to approve a proposed partnership between Southampton and Stony Brook University hospitals, delaying the next step in negotiations that could lead to the eventual construction of a new Southampton Hospital on the Stony Brook Southampton campus in Shinnecock Hills.

The board postponed a decision on the partnership at its meeting on July 31, pushing off any action at least until September, when it is next scheduled to meet. Sources say representatives of Governor Andrew Cuomo became aware of the proposal and referred the financials associated with the proposed partnership to the State Division of the Budget for a review before the SUNY board takes action.

But H. Carl McCall, chairman of SUNY’s 18-member Board of Trustees, said this week that the panel still supports the proposed partnership and will work closely with all parties as the process moves forward.

“The SUNY Board of Trustees recognizes that in order to maintain the highest quality medical education and patient services on Long Island and across New York, we must embrace changes in the health care delivery landscape,” Mr. McCall said in a statement released on Wednesday morning. “Through a unanimous resolution we have publicly supported the idea of hospital networks such as what Stony Brook and Southampton are proposing. We will continue our support of this idea because of the tremendous opportunities it could bring our students, faculty, and the public.”

The two hospitals currently have a confidential tentative agreement in place, and the negotiated contract has recently been sent to the State Division of the Budget for review, Mr. McCall noted.

Officials at SUNY, which operates Stony Brook University and its hospital, are said to be reluctant to move forward with an approval, mainly because of a failed acquisition of the Long Island College Hospital in Brooklyn by SUNY Downstate Medical Center back in 2011. The acquisition lost both entities significant amounts of money—hundreds of millions of dollars, in SUNY’s case—and eventually resulted in a lawsuit after SUNY decided to close the Brooklyn hospital.

If and when a Stony Brook-Southampton partnership agreement is approved, the next crucial step would be a submission for a certificate of need from the State Department of Health, which would actually clear the path for it to happen—and that process alone could take at least another year. Approval is also needed from various state agencies, including the attorney general and the state comptroller, and local health alliances, before anything is finalized.

Southampton Hospital has been quick to sign off on the agreement to partner with Stony Brook. Robert S. Chaloner, president and chief executive officer of the hospital, said that although he and the institution’s board of directors are frustrated about the rate of progress on the partnership vote, they are eager to get the process moving along, because a big name like Stony Brook will bring new opportunities to the hospital that will benefit both it and the surrounding community.

“We need more access to health care. We want to serve everyone. Everyone deserves health care, rich or poor,” Mr. Chaloner said. “We absolutely believe this is the right thing for the future.”

The partnership would allow Southampton to continue running under Stony Brook’s Article 28 operating license, but the Southampton Hospital Association would retain ownership of physical assets that Stony Brook would lease for a nominal fee. Employees at Southampton Hospital would work for the association, though they would be part of the lease agreement between the association and Stony Brook.

But the ultimate goal of the partnership, Mr. Chaloner said, is to move the entire hospital to the Stony Brook Southampton campus in Shinnecock Hills, and create a setup similar to what the university has at its main campus to the west. Stony Brook already hosts a graduate-level physical therapy program at Southampton, but having the local hospital on the premises would allow for additional medical-based programs, as well as more jobs and other economic benefits, Mr. Chaloner said.

“We will play a huge role in revitalizing that campus,” he said.

Mr. Chaloner also noted that Southampton Hospital had decided several years ago that a new building was needed, and constructing a new hospital—which is now estimated to cost up to $250 million to build, but that number is expected to climb—will take many years to plan. Postponing the partnership vote only pushes back that long-awaited process.

While Mr. Chaloner said he understands SUNY’s hesitancy to act quickly, he noted that the board’s reasoning is moot: Unlike Long Island College Hospital, neither Southampton nor Stony Brook is in poor financial standing, and their proposed partnership will only result in more monetary benefits.

“I don’t blame anyone. Clearly, things have not gone well in Brooklyn. It’s been such a problem over there,” he said of SUNY’s failed acquisition. But, he continued, “it’s a totally, totally different world out here. There is no comparison.”

Key players at Stony Brook’s end of the deal remain optimistic about the benefits that the partnership will bring, and they too are understanding of the time it is taking for the SUNY board to act.

“We are looking forward to this partnership and helping to create a health care delivery system that will better service the needs of residents of eastern Long Island and beyond,” Stony Brook University Hospital Chief Executive Officer L. Reuven Pasternak said in a joint statement also signed by Kenneth Kaushansky, the senior vice president for health sciences. “As thoughtful and positive discussions continue, we understand the level of due diligence that needs to take place in order for this partnership to be beneficial to both hospitals and to the community.”

State Assemblyman Fred W. Thiele Jr., however, has been vocal about his frustration with SUNY during the process. He said the SUNY board’s “unusual and unnecessary” delays have cost both Southampton and Stony Brook a lot of time and money.

Still, Mr. Thiele said he is very supportive of the partnership because he believes it will benefit both institutions tremendously—it will allow for Stony Brook to maintain its portion of the health care market on the East End, and it will bring Southampton into a new paradigm of health care that is created with this kind of affiliation.

The most irritating part of the whole ordeal though, Mr. Thiele continued, is that the “very detailed” memorandum of understanding that was the first step in starting the partnership discussion was approved nearly two years ago—and even that required a year of negotiations. Mr. Thiele said SUNY needs to get past the mistake it made with Long Island College Hospital and not let it get in the way of the Stony Brook-Southampton agreement, because, as Mr. Chaloner said, the two scenarios are not the same.

“The differences between Brooklyn and Southampton are as different as day and night. It’s a little bit disappointing when two years later people are still pointing at that,” Mr. Thiele said. “We should have been totally through the process ... and much closer to the finish line than we are now.”

Regardless of where the SUNY board now stands, Mr. Chaloner said he remains optimistic that it will eventually come around and see that approving this kind of partnership is the best thing to do for both entities.

“I and our board remain firmly committed,” he said. “The proposal supports itself. It’s not like we’re trying to sell ice in Alaska.

“It’s time to get moving, folks,” Mr. Chaloner added.