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October 9, 2007

Ellwood City Hospital seeking merger

By MaryAlice Meli

The hot question being asked at Ellwood City Hospital these days is whether the 95-bed facility has been sold.

Nearly 450 employees of the borough’s largest employer want to know.

The community wants to know.

“We want to make sure Ellwood City Hospital remains part of the community for many, many years and to protect the work force,” said Christy Spoa, president of the hospital’s board of trustees.

Spoa credits the leadership of Herbert S. Skuba, hospital president and chief executive officer, for an initiative to seek affiliation with another hospital or health system.

“It’s almost impossible to survive without being affiliated with something larger,” Spoa said, whether it be a hospital, a hardware store or a supermarket. Spoa, who owns the Save-A-Lot grocery store in Franklin Township, said, “I’ve seen guys in retail who waited too long and then were not able to survive.”

Skuba issued requests for proposals for a possible sale or merger six months ago. Currently, he and Carolyn Izzo, chief operations officer, Christopher Little, chief financial officer, and board members Spoa, David Barensfeld and Jack White are studying proposals from West Penn Allegheny Health System and Butler Health System.

Skuba said he recommended taking action before being forced to do so when the hospital’s market share continued to shrink. That shrinkage is because of several reasons, he said.

“Small hospitals don’t have the negotiating clout of large systems,” Skuba said. “There’s no question, the large systems are making money.”

Skuba said reduced reimbursements from the government and insurance companies have taken a toll on the hospital’s resources, including a trust fund that has kept the facility in the black and supported a recent 11,400- square-foot expansion that cost more than $2 million.

Another critical factor is the hospital’s difficulty in attracting and keeping qualified physicians and specialists, Skuba said.

Pennsylvania’s medical malpractice rates have chased specialists away, he said, noting the hospital once had seven orthopedic specialists and now have only two.

“Three left the state and two others don’t want to travel here,” he commented.

Other doctors who don’t like to travel to rural or small town locations have taken their patients away from Ellwood City, to Beaver and Pittsburgh. This has resulted in a significant drop in the bed occupancy rate to 38 percent for the year.

“Practitioners want to have a family life,” Skuba said.

Skuba conducted a two-hour informational meeting with hospital employees Thursday, even though no decision could be announced. He said they seem to respect the fact that the board’s goal is to save the hospital and as many jobs as possible.

Lenore Bazzichi, a member of Ellwood City Revitalization, noted the hospital is an important part of the community.

She is concerned not just for the existing jobs that could be lost, but also for future jobs that technology might bring, she said.

“It’s a drawing point to attract businesses and families to town,” Bazzichi said of the hospital, adding, “Ellwood City is going to grow again.”

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