Hospitals to operate with one license
Updated 2:19 pm, Wednesday, November 13, 2013
They may not be able to say that much longer.
The two hospitals' umbrella group -- the Western Connecticut Health Network -- filed a certificate of need in August with the state Office of Health Care Access asking the two hospitals operate under a single license.
"When hospitals have a merger, they have a single license,'' he said. "When they have an affiliation, they have separate licenses.''
Sally Herlihy, the network's vice president for planning, said having a single license may mean a merger in a legal sense.
In fact, she said, the two hospitals have worked as different branches of the same organization since they affiliated in 2010.
"They have the same board of directors, the same clinical standards,'' she said.
A single license gives them the same billing system. That, Herlihy said, can save the network considerable money
"We are constantly looking for ways to streamline our operations and achieve efficiencies of scale,'' she said.
The change won't affect anything else the two hospitals do to serve patients, she said. Nor would it bring about layoffs in the future, she said.
The problem is the information technology New Milford Hospital now uses won't meet new government standards that go into effect in October 2014.
To bring that system up to the new standards, Herlihy said, the network would have to spend $3.1 million.
Under a single license, the two hospitals would have a single billing system. That would cost about $600,000 in capital costs, Herlihy said, saving the hospital $2.5 million.
In addition, she said the two hospitals will save on duplicating services such as audits. It will also create efficiencies of scale for reporting Medicare costs, for accreditation proceeding, and for granting credentials for medical staff.
That will mean the network will save about $700,000 a year in operating costs, Herlihy said.
However, Herlihy said, because this involves changing information technology, it will not mean layoffs.
"We'll still need the same number of people,'' she said.
While the state Office of health Care Access sorts through this application, it is still studying another -- the affiliation of Western with Norwalk Hospital.
That application is still pending, said WCHN spokeswoman Andrea Rynn.