Medical center begins new era

Monday's dawning of a two-campus Memorial Medical Center in Johnstown concludes an intense, 15-month acquisition process and marks the end of UPMC Lee Regional.

But it signals the beginning of a new, powerful health-care institution and economic driving force, Conemaugh Health System leaders say.

"We are going to take the lead in economic development in this community," Robert Gleason, former Memorial chairman, said at a press conference Friday.

Powered by the $300 million combined annual revenue of Memorial and Lee, the new Memorial has the clout to bring in new programs and attract customers from a wider area, hospital leaders said.

"Today is a wonderful day for our community with these two hospitals coming together," Gleason said. "We expect, as we move forward, to create more opportunities. We are going to have new technologies."

Hospital leaders would not identify new programs they want to add, saying they have been focused on closing the Lee purchase.

Strategic planning will begin in September and will focus on expanding business and developing new economic opportunities for the Greater Johnstown region, said Scott Becker, chief executive officer for both Memorial and Conemaugh Health System.

"I think it's the beginning of a new day," Becker said.

That attitude is encouraging, an expert on hospital economics said.

"It's a cheering prospect," said Sanford Steever, editor of Health Care M&A (mergers and acquisitions), a monthly newsletter published by Irvin Levin Associates of Norwalk, Conn.

Most mergers and acquisitions are focused on cutting overall costs through downsizing, Steever said in a telephone interview.

Gleason admits the acquisition began with the idea of economizing.

"The major reason was our community was having a difficult time supporting two major institutions," Gleason said. "We felt one strong hospital would be better for the community."

Now the third-largest health system in western Pennsylvania, Conemaugh can continue recruiting highly skilled specialists and build its outreach into neighboring counties.

"We will be more of a tertiary engine for the recruiting of physicians and bringing more patients so we can actually expand our influence," Becker said.

Becker said credit for the acquisition goes largely to Gleason, incoming Memorial Chairman James Hargreaves and Conemaugh Chairman Sam Catanese. All three were born and raised in Johnstown, Becker added.

"We are going to be here," said Becker, who also is a Johnstown native.

The strategic planning will include further realignment of existing services, including the future of cancer-treatment programs.

Beginning Sept. 1, Conemaugh and the University of Pittsburgh Cancer Institute will join forces to unite oncology programs. It will operate as UPMC Cancer Center, John Murtha Pavilion in facilities to be determined as part of the planning, Becker said.

Staff retention

About 850 former Lee employees will be working for Memorial tomorrow.

Although several hundred Lee workers bailed in the months since The Tribune-Democrat revealed plans for the acquisition in May 2004, about 95 percent of Lee's work force as of June 1 has been retained.

Becker admits there could be additional staff adjustments through the planning process.

"We can't sit here and say that everything will be status quo," Becker said. "We will analyze and integrate services. Employees will be considered, but more important is the patient and level of care."

As services are integrated, plans to introduce or expand other services also will advance, he said.

Employees who remember staffing cuts in months after Memorial merged with Good Samaritan Medical Center in 1998 should not be overly concerned, Memorial President Steve Tucker said.

"We learned a lot from the Good Sam merger," Tucker said. "We learned from Lee employees who have already come up to Memorial."

Expanding services means providing higher levels of procedures and more complex surgery at Memorial, Gleason said.

"We don't want our people to have to leave Johnstown," Gleason said.

"We don't want them to have to go to Pittsburgh or Hershey."

More than 95 percent of all medical care should be available at the combined Memorial Medical Center, Gleason said.

Market forces

Convincing outsiders of Conemaugh Health System's economic scope has been frustrating, Hargreaves said. Conemaugh's executives wanted Attorney General Tom Corbett's antitrust lawyers to look at Conemaugh as a regional health system, competing with the likes of Geisinger Health System of Danville, Penn State's Milton S. Hershey Medical Center and PinnacleHealth Hospitals of Harrisburg.

By focusing on a market area of Cambria County and northern Somerset County, the antitrust section saw Memorial as a potentially monopolistic powerhouse, Hargreaves said.

Memorial considers Geisinger, Pinnacle, Altoona Regional and Westmoreland health systems to be competitors in the same market area, Becker explained, adding the Lee acquisition makes Conemaugh as big as any of those.

"Don't get us wrong," Becker added. "We are thrilled with what we have in the form of a consent decree."

The decree was negotiated with the antitrust section and approved Friday by U.S. District Judge Kim Gibson. It cleared the way for Monday's changeover.

"When this is over, we've invited Attorney General Corbett back," Becker said. "We want him to see the level of care we have here."

They also will show him Conemaugh's other economic engines, including the proposed Greater Johnstown Regional Technology Park in Kernville.

Not only is Memorial Johnstown's only hospital, it is the region's largest employer.

"We have a much greater responsibility now," Gleason said.

Gleason said the health-system leadership is ready to show the community and skeptics Conemaugh is up to the challenge.

"We are going to have to prove it," Gleason said.