Hospitals will merge today
The Derrick, 11/30/01 By JUDITH O. ETZEL
A special thank you goes
out to The Derrick for allowing this article to be posted
THE FORMAL DOCUMENTS WILL BE SIGNED BEFORE A LUNCHEON AT WANANGO COUNTRY CLUB.
The formal merger of Pittsburgh-based UPMC Health System
and Northwest Health System, the parent company of hospitals in Oil City and
Franklin and several other health care agencies, happens at noon today.
Lawyers and board members from both non-profit health
organizations will sign the merger documents prior to a luncheon at Wanango
Country Club. The act of signature will set into motion major changes in how
health care is provided in Venango County.
At the heart of the deal, one in which UPMC will own all
of Northwest's property and employ all its 1,300-member staff, is a $65 million
hospital pegged for a 144-acre site in Cranberry Township. Preliminary site work
is under way and groundbreaking ceremonies will be held in the spring.
Today's sign-on-the-bottom-line merger comes two years
after the sprawling UPMC organization and Northwest announced their intentions
to join forces. Originally, UPMC was scheduled to take the reins in December
1999, two months after the initial announcement.
"We are bit late on this but we spent a lot of time
creating the merger agreement and I think that was appropriate. And changing the
site (from Sugarcreek to Cranberry) cost us time. That, in turn, delayed the
design phase because we were building in a different place," said Neil
Todhunter, the CEO at Northwest.
In terms of numbers, the merger has enormous implications:
It affects the county's single largest work force - 1,300 people. It will result
in the single largest building project ever in the county - $65 million. And it
has the potential to gain even more momentum, with a 50-office physicians
building, an assisted living complex and a psychiatric treatment center all
tentatively planned for the UPMC Northwest acreage in Cranberry Township.
What will change immediately in today's merger signing is
the name, the board of directors, the title to property and the employees' wage
The new organization is known as UPMC Northwest and will
be the newest addition to the Pittsburgh-based health system's string of
hospitals, surgical and rehabilitation centers, specialty hospitals and other
facilities throughout western Pennsylvania. Northwest will no longer operate
independently but will conduct its business under the UPMC umbrella.
The board of directors, until now solely filled by local
residents who served as overseers of Northwest Health System, will change
Serving on the new UPMC Northwest board through what is
expected to be a three-year construction period will be William Clark, James
Daugherty, Paula Logue-Phenicie, Sanford Powell, Bruce Rosen and Gail Welch, all
of Oil City; and Edward Cowart, Henry Gent III, James Knarr, James McLaughlin,
Robert Miller, John O'Connor, Keith Pemrick and Richard O. Way, all of Franklin.
Three UPMC representatives from Pittsburgh also will serve on the board.
Daugherty and Knarr will be UPMC Northwest's
representatives on the parent UPMC Health System board which has representation
from all 19 hospitals in its chain.
Northwest's property, which will become UPMC's, includes
the hospitals in Oil City and Franklin, the West Unit in Franklin, the
Outpatient Physical Therapy Facility on Sugarcreek's Circle Street, the Rowe
Building in Oil City, Sugarcreek Station and satellite offices in Knox, Emlenton
and Grove City.
The newest addition of property will be the former Quaker
State Innovation Center in Cranberry Township. That purchase agreement is nearly
The Oil City and Franklin hospitals will remain in
operation until the new four-story hospital in Cranberry Township opens,
expected to be sometime in mid-2004. One year after the new hospital opens, the
main Oil City and Franklin hospitals will be demolished if no buyer or tenant is
Efforts to try and fill those buildings, said Todhunter,
are in the preliminary stages.
The Northwest workforce, pegged at about 1,300, will have
its paychecks signed by UPMC from today on. Affected by the merger are Northwest
people working at the hospitals, the satellite offices, Sugar Creek Station,
Visiting Nurses Association and VNA Home Care. Northwest is the largest single
employer in Venango County.
No merger-related changes in staff are planned, said
Todhunter, who keeps his role at top administrator.
Today's business agreement also sets into motion a
specific timeline, one which requires UPMC to start construction of the new
Northwest hospital within 18 months. It also stipulates the medical behemoth
build the new hospital within five years.
Northwest was the first health system in UPMC's vast
territory to gain a new hospital in a merger deal.
The design of the new Northwest hospital is completed,
said Todhunter, and the HBE Inc. firm of St. Louis, the designer, will go out
for various construction bids within the next few weeks.
Today's merger kick-in signals the end of a 10-year effort
to achieve a new hospital. When the Oil City and Franklin hospitals merged in
1992, the aim was to consolidate services, save money and ratchet up available
health services. A reconfiguration of those health services a year later sparked
a bitter controversy between the two hospitals, resulting in a court settlement
which directed Northwest to build a new hospital.
In October 1999, Northwest capped that progress by
announcing it had found a partner with sufficient funds - UPMC - to build a new
health care center in Venango County.
"It's been 10 years since the merger and I think
people support the concept of one unified hospital. This merger with UPMC is
positive and our organization will gain substantially: a new facility and a
relationship with UPMC's physicians and technologies that advance health care
for this community. The opportunities are staggering," said Todhunter.
UPMC's acquisition of Northwest, he continued, should not
be compared with mergers involving banks, oil companies and similar corporations
which eventually impacted Venango County in ways that decimated the local
"Health care is different then oil and banks. We need
your person, your physical presence, to do our jobs. And we need to treat you in
the local environment, unlike doing your banking with a card somewhere else.
This merger works to this community's advantage because it keeps quality health
care here," said Todhunter.