UCH, Poudre Valley Announce an Intent to Link Arms

Two historically independent hospitals told the region’s patients June 22 that they hope to become partners in the near future.

The boards of directors of both University of Colorado Hospital and Poudre Valley Health System (PVHS) signed a non-binding letter of intent – meaning a final deal is not inevitable – to form what would be one of the largest hospital systems in the state.

More significantly, it would also be the only system trying to tie together two different approaches to patient care: the community care focus of Poudre Valley and the academic medicine of UCH and its partner at the CU School of Medicine.

UCH President and CEO Bruce Schroffel says he’s energized by the challenge. “I am very excited about the possibility of a very different kind of health system for the region.

“We’re joining two of the state’s most renowned health care organizations – both of which have won numerous national and international recognitions – into what we think will be a fantastic benefit for patients.”

Both Schroffel and PVHS CEO Rulon Stacey foresaw that, if a final agreement to forge a partnership is reached, both hospitals would retain their uniqueness while pooling some financial resources to increase their joint clinical capabilities and geographic reach.

“It will facilitate the sharing of the considerable medical expertise, specialties and resources of our respective organizations,” Stacey agreed. “It is indeed an historic day for health care in Colorado.” He foresaw “opportunities for patients, communities, staff and physicians at two top-performing health systems, both Colorado born and bred.”

Schroffel did not anticipate any changes in staffing, certainly none in the near term. “Our goal here is to grow, to create more opportunity for our community and, not least, our people.”

Indeed, both organizations started talking not to save money – both are exceedingly strong financially, with high marks from bond-ratings agencies and healthy operating margins – or merge staffs, but to muscle up in anticipation of health insurance reform.

“Nobody really knows yet what reform will look like,” Schroffel said, “but we do know this: there will be less money in the system, and we will have to learn to do more with less.”

Such concerns have led to waves of consolidation among hospitals nationwide. They are buying community physician practices, acquiring competing hospitals, and fashioning new networks.

Recently, for example, Littleton Adventist and Kaiser announced plans to open new facilities, Centura has acquired Heart of the Rockies (a Salida practice), Penrose was building a new urgent care facility in Colorado Springs, Children’s Hospital Colorado has begun a new “Pediatric Collaborative” with community OBs, Banner has opened two new facilities in northeastern Colorado, and UCH announced it was considering building new satellite facilities in both the south and north metro areas.

Moreover, many hospitals (including UCH and Children’s Colorado on the Anschutz campus) are expanding their home facilities. The trend has been national, too, and a number of other consolidation deals in the Rocky Mountain region have been proposed.

“Everybody,” Schroffel has noted, “has been talking to everybody.”

Poudre Valley and UCH first began discussing ways to collaborate seven months ago.

After many formal and informal exchanges Schroffel, Stacey and their respective boards of directors hammered out a “letter of intent” that was ultimately signed June 22. Although the hospital is not formally a part of the university, its physicians are all on the School of Medicine faculty. President Bruce Benson, the CU Board of Regents, School of Medicine Dean Richard Krugman, and Vice President for Health Affairs, Executive Vice Chancellor for the Anschutz Medical Campus Lilly Marks were also closely involved in shaping the letter.

While both hospitals know what they would like a partnership to look like, months of auditing, planning and detailed work remain before a joint operating agreement could be shaped and finalized. The parties hope to reach some sort of conclusion in the fall.

In the process, Schroffel is well aware that such a historic change is bound to open not just opportunity, but uncertainty among the staff and partners about future roles and responsibilities. “As always, we’ll be communicating like crazy as we all invent this new era. This is a profound opportunity.”

Both he and Stacey at Poudre Valley have scheduled town hall meetings to discuss their plans with staff members and clinicians, as well as ongoing meetings and communications to keep people informed.

The town hall meetings at UCH are scheduled for June 29 at 7:30 a.m. and June 30 at 4:00 p.m. Both will take place in the Anschutz Inpatient Pavilion, in rooms 2007/2133.

“We have been going through many changes in recent times,” Schroffel noted in a message to staff and physicians Thursday morning. “Now, too, we may soon lock arms with literally one of the finest community hospital systems in the country. You work at a place where all things are possible. I ask you to join me in imagining still more possibilities for our patients, our partners and ourselves.”