The rest of the $20 million-plus would have to come from other sources, including HealthAlliance’s own borrowing. Meanwhile, the financially challenged healthcare system also needs to raise money in an uncertain marketplace to fund operating deficits, to build its financial reserves, for cash-flow purposes, and to fund other talks with possible partners seemed a prudent step. “In a reconfigured state we see ourselves as profitable,” said Ryan. An affiliation could range from a loose alliance for specific limited purposes to an outright merger.
A tie-in with other small hospital systems in the region did not seem an adequate solution, said Ryan. An affiliation with a large downstate multi-hospital system raised the spectre that HealthAlliance might be swallowed up as a distant province of a metropolitan owner. To the HealthAlliance board and administration, the most promising choices for affiliation seemed to be either HealthQuest, the successful Poughkeepsie-based three-community-hospital system that in terms of revenues is now almost three times as big as HealthAlliance. Another option is linking up with one of the Albany tertiary hospital systems, St. Peter’s or Albany Medical.
HealthAlliance is talking to all three, said Ryan.
HealthQuest had leadership change earlier this year. Denise George and Donna McGregor are the new interim acting co-CEOs. Rob Dyson, the chairman of the board, is also president of the local Dyson Foundation, which at the end of last year had an investment portfolio of $235 million. Discussions with HealthQuest have been taking place at a board level.
The two Albany hospital systems are the closest tertiary healthcare providers — hospitals that provide specialty services beyond what community hospitals can — to Kingston. A link with either would expand their market share south of Albany. HealthAlliance routinely sends many referrals to both.
The decision on partnership is probably months away. At present, board chairman Ryan is intrigued with the HealthQuest possibility. Assemblyman Kevin Cahill, meanwhile, leans toward an affiliation with one of the Albany tertiary-care systems. With so much activity among insurers and large groups of specialty providers, other options may be available.
Two other resignations
Lundquist’s resignation was accepted last Thursday by the HealthAlliance board. No cause was given. “Dave Scarpino and the executive team have the board’s full support as we move toward the next phase of HealthAlliance,” Ryan was quoted as saying in a press release.
Also disclosed later the same day were the resignations of two other members of HealthAlliance’s executive team: chief operating officer Charles Flinn and vice president of support services of support services Dennis Pignato. According to 2010 compensation records, the three administrators who resigned last week received total compensation of $1,129,787, including benefits and bonuses, that year.
The present officers of the HealthAlliance board of directors, elected on March 27 to a two-year term, include chairman Ryan, vice chair Cynthia Lowe, treasurer Craig Sickler and secretary Nancy Davenport. The other board members are Howard Berliner, Kevin R. Bryant, Pamela Carroad, Dr. Martin Cascio, Thomas Collins, Carol Crews, Dr. Eugene Heslin, Thomas Jacobi, Dr. Mark Josefski, Dr. Ellis Lader, Rich Mathews, Stephanie Murphy and Albert Spada.
Several board members either declined official comment or did not return phone calls. Currently, Ryan is the sole spokesperson for the HealthAlliance board.
