Regulators Approve APD, Dartmouth-Hitchcock ‘Affiliation’
Lebanon — Alice Peck Day Memorial Hospital and Dartmouth-Hitchcock, two health care organizations with long histories in the Upper Valley, have formalized a relationship that will give D-H, a teaching hospital with a regional footprint, the final say over key matters at its smaller neighbor.
The new relationship, which the parties have labeled an “affiliation,” took effect Tuesday after the Charitable Trusts Unit and the Consumer Protection and Antitrust Bureau in the New Hampshire Attorney General’s Office signed off, the hospitals said in a joint news release.
The deal, which was in the works for more than two years, was undertaken in response to growing financial pressures at APD and to D-H’s desire to open up space for more seriously ill or injured patients at its Mary Hitchcock Memorial Hospital.
Completion of the deal was hailed by each institution’s chief executive. The “neighbors” have become “partners,” James Weinstein of D-H said in the release. “By working together, we will be able to direct our combined resources toward creating a sustainable health system,” he added.
The affiliation gives D-H the right to approve the smaller hospital’s budget and strategy, appoint one-third of its governing board and remove the others. Beginning in 2018, D-H will also have the power to appoint and remove APD’s chief executive.
The two institutions “worked closely over the past two years to build a good working relationship,” APD Chief Executive Sue Mooney said in the release.
The two hospitals “will now begin work on previously identified clinical integration opportunities,” the release said. The hospitals have identified emergency, in-patient and obstetrical services as areas of focus. Filings with the state showed that APD has posted financial losses in its emergency and obstetrical units.
Alice Peck Day, with $56.2 million in net patient service revenue in the fiscal year that ended Sept. 30, 2014, will join a network of affiliates that along with D-H’s flagship institution, the 400-bed Mary Hitchcock Memorial Hospital in Lebanon, includes New London Hospital in New London, Mt. Ascutney Hospital and Health Center in Windsor and Cheshire Medical Center in Keene.
D-H posted net revenue of $1.4 billion in the fiscal year that ended June 30, 2014. Those results included revenue from New London Hospital. APD’s future results will be incorporated into D-H’s financial reports, officials have said.
The formal courtship between APD and D-H began in January 2014, when APD, a 25-bed facility that was founded in 1932, and D-H, a teaching hospital affiliated with Dartmouth College’s Geisel School of Medicine, announced that they were talking. The outreach came after policy discussions in Washington, D.C., raised the possibility that APD would lose the enhanced payments it receives as a Medicare-designated “critical access hospital.” That’s a program aimed at supporting health care in underserved rural areas.
News of the proposed affiliation between the neighboring medical centers generated little public opposition in communities in which many residents have experience with one or both institutions as employees and patients.
But consummation of the deal leaves some questions unanswered at Alice Peck Day Lifecare, which owns and operates the Harvest Hill and Woodlands senior living facilities. The affiliation between APD and D-H leaves APD Lifecare, which posted a $1.4 million operating loss in fiscal 2014, as a stand-alone nonprofit. APD Lifecare has up until now operated as an affiliate of its namesake hospital, which improved the housing venture’s access to credit.
Rick Jurgens can be reached at rjurgens@vnews.com or 603-727-3229.
