South Nassau, Mount Sinai Health System talk merger

Fireworks: South Nassau Communities Hospital's independence days may be coming to an end, if merger talks with the Mount Sinai Health System come to fruition.
BY GREGORY ZELLER //

A potential alliance between a nearly century-old Long Island hospital and one of New York’s largest health systems is in the works.

The directors of South Nassau Communities Hospital have entered “a period of exclusive negotiations” with the Mount Sinai Health System that could create “an alignment of medical services, management and governance” between the 455-bed Oceanside hospital and the New York City-based healthcare giant, South Nassau said Wednesday.

Over a course of months, the independent hospital and the multistate health system – which encompasses roughly 7,100 primary and specialty-care physicians, 12 ambulatory surgery centers, 31 affiliated community health centers and more than 140 ambulatory practices throughout NYC, Long Island, Westchester and Florida – will hash out the terms of a “formal affiliation,” according to South Nassau.

An ultimate agreement would make South Nassau, which has served Nassau County residents since 1928, the “flagship institution of Mount Sinai on Long Island,” the hospital noted, while affiliating the Oceanside medical center with the Icahn School of Medicine at Mount Sinai, ranked among the nation’s top medical schools.

Both of those developments would be significant for one of Long Island’s last remaining independent hospitals, particularly in a region dominated by the New Hyde Park-based Northwell Health system – New York’s busiest healthcare provider and largest private employer – and known for well-heeled medical institutions including the Hofstra Northwell School of Medicine, Stony Brook Medicine and Northwell’s Feinstein Institute for Medical Research.

South Nassau President and CEO Richard Murphy called the negotiations “an important step” toward securing the hospital’s future growth.

“This is the correct move at the right time,” Murphy said Wednesday. “If a formal affiliation is reached, it will translate into a higher level of care … for the communities we serve on Long Island.”

Kenneth Davis, an MD who serves as Mount Sinai’s president and CEO, noted the potential for a “transformative health partnership.”

“Our goal is that the patients and families of Long Island have access to our high-quality care and cutting-edge treatments,” Davis said in a statement.

Richard Murphy: Right move, right time for South Nassau Communities Hospital.

The South Nassau Board of Directors formed a special “affiliation committee” months ago to explore the potential benefits of an alliance with a large health system. With help from consultants at Deloitte Transactions and Business Analytics LLP, a subsidiary of UK-based Deloitte Touche Tohmatsu Ltd. and leading business-consulting practice, the committee ultimately recommended Mount Sinai as the best potential partner.

As of this week, the two institutions have signed a nonbinding letter of intent that facilitates “a more in-depth period of due diligence” and “exclusive talks” that could lead to a deal, according to South Nassau.

Both the Mount Sinai and South Nassau directors boards would have to approve an official affiliation, as would the New York State Department of Health – a process that could take several months, possibly the remainder of 2017.

While talks are in nascent stages, South Nassau said Wednesday that an affiliation agreement “would allow for continued local control” of the Oceanside hospital, and that Mount Sinai has already agreed to “a significant investment in the physical plants and clinical programs of South Nassau.”

There are many details to be hammered out, but there’s no doubt that South Nassau principals see a Mount Sinai alliance – and a partnership with the Icahn School of Medicine – as a major score for the 89-year-old nonprofit medical center, which serves some 900,000 South Shore residents annually with a staff of 3,500 total employees and 900 affiliated physicians.

South Nassau officials were already looking ahead, announcing in 2016 their plans to construct a $130 million, 58,000-square-foot addition that will double the hospital’s Emergency Department capacity, among other upgrades. But in a possible Mount Sinai partnership, Joseph Fennessy, chairman of the South Nassau Board of Directors, referenced a “once-in-a-generation opportunity to join forces with a world-renowned institution.”

“We believe this partnership has the potential to improve the quality, breadth and depth of services available to residents of Long Island while allowing South Nassau to achieve our goal of becoming a true tertiary-level center of excellence,” Fennessy said Wednesday. “The South Nassau Board of Directors is excited to partner with the Mount Sinai Heath System to bring their state-of-the-art clinical, academic and research capabilities to the people of Long Island.

“South Nassau has continued to advance its clinical capabilities over the past several years as it strives to provide a higher level of care to the communities we serve,” the board chairman added. “This affiliation will accelerate this process dramatically.”