Ellis Medicine to stay independent

After a two-year review of its options, Ellis Medicine’s board of trustees has decided the Schenectady hospital and health system should remain independent.

The board announced the news Thursday to great relief from the system’s more than 3,000 employees, who were uncertain what a potential merger, consolidation or affiliation with another entity might mean for their jobs, patients and operations in general.

“We believe that for the foreseeable future, an independent Ellis, with a single-minded focus on our community, best serves our patients,” said Mark Little, chair of the Ellis board of trustees.

That wasn’t always the case. As the health care

industry has increasingly moved toward consolidation on both a national and regional scale, leaders at Ellis decided they needed to conduct an in-depth review to determine whether remaining a locally run, independent health care provider was in the best interests of the system and community.

The review began shortly after Paul Milton took over as CEO from James Connolly in 2016, and was led by the board, physician leaders and senior staff.

During that time, the system solicited, received and considered affiliation and merger proposals from both local and out-of-state health care organizations. Milton declined to name those behind the offers, citing confidentiality agreements.

“We were open to out-of-state hospitals, insurance companies and physician groups,” he said. “We received responses from inside the local market and outside. So it was very inclusive.”

Ultimately, however, the board decided that remaining a smaller, local

“

In any kind of business there are some pros you get from being bigger . ... But there are also strengths to being smaller. You’re more nimble, more creative more in control of your own destiny. Paul Milton, Ellis Medicine CEO

and independent operation would be in the community’s best interest, he said.

“We know it’s going against the grain,” Milton said. “In any kind of business, there are some pros you get from being bigger, whether you’re negotiating on rates or to buy supplies, you’re probably a little bit stronger. But there are also strengths to being smaller. You’re more nimble, more creative, more in control of your own destiny.”

At more than 3,000 employees and 438 beds, the Schenectady system is indeed one of the region’s smaller hospital systems.

It has four campuses, born from a merger more than a decade ago with St. Clare’s Hospital on Mcclellan Street and Bellevue Woman’s Hospital in Niskayuna, as well as the recent addition of an urgent care center in Clifton Park.

For comparison, Albany Medical Center boasts more than 8,000 employees, a 734-bed hospital and affiliations with Saratoga Hospital to the north and Columbia Memorial to the south.

St. Peter’s Health Partners, run by the national health Catholic health system Trinity Health, is the region’s largest private employer with more than 12,500 employees and a $1.3 billion annual budget. It includes St. Peter’s Hospital in Albany, Albany Memorial Hospital, Samaritan Hospital and St. Mary’s Hospital in Troy, and Sunnyview Rehabilitation Hospital in Schenectady, as well as a continuing care and hospice network.

The decision to remain independent, Milton admitted, could have been different if Ellis Medicine wasn’t in a strong state financially and clinically. Its net income in 2016 was $6.6 million, up from $4.5 million in 2015 but down from $13.8 million in 2014, according to tax filings.

If its financial picture changes, or if outside industry forces demand it, the board may revisit its decision, Milton said.

“We still have our challenges ahead of us,” he said. “But we feel confident that we can make a bold decision like this and sort of double down and make a go of it.”