Dartmouth-Hitchcock Health and GraniteOne Health signed a letter of intent to merge, which would create an eight-hospital not-for-profit system spanning New Hampshire and Vermont.
Their combination will help the New Hampshire-based organizations scale up for growing demand for inpatient, specialty and sub-specialty services, particularly in the southern part of the state where Dartmouth has sought to expand.
Executives pledge to coordinate and strengthen behavioral health and substance abuse services as well as reinforce care in rural areas. They also look to address nutrition, food security and access to preventative care as the combined Dartmouth-Hitchcock Health GraniteOne aims to curb diabetes, asthma, obesity and other chronic conditions.
“For 15 years, our two organizations have worked closely together to improve the lives and health of our patients and their families,” Dr. Joseph Pepe, CEO of GraniteOne Health, said in prepared remarks. “We have complementary visions for what healthcare in New Hampshire could be.”
While executives claim that scale is essential to survive, health policy experts warn that consolidation, particularly between neighboring healthcare systems, will lead to higher prices.
Dartmouth and GraniteOne’s largest hospital, Catholic Medical Center, tried to merge in 2009. But that was shot down by the then-New Hampshire Attorney General Michael Delaney who said the combination would result in “a profound change to governance structure of the CMC Charities and diminish the fiduciary duties.”
Delaney also said there weren’t sufficient safeguards to ensure that post-affiliation surpluses wouldn’t be manipulated. This was after a debate about the merger’s potential to compromise religious objectives.
The announcement explicitly stated that the Catholic Medical Center will continue to “adhere to its Catholic model of care while Dartmouth-Hitchcock Health will continue to serve its patients as it does today in all its existing healthcare facilities.” All organizations within the combined system would keep their current names, identities and local leadership.
“We respect and admire CMC’s historical and unique role in the Greater Manchester community and its Catholic healthcare mission,” said Dr. Joanne Conroy, CEO and president of Dartmouth-Hitchcock Health. Manchester (N.H.) Bishop Peter Libasci and the National Catholic Bioethics Center are actively engaged in this process, Conroy added.
Lebanon, N.H.-based Dartmouth reported an operating income of $47.5 million on revenue of $2.07 billion in 2018, up from a $7 million operating loss on revenue of $1.97 billion in 2017, according to the Modern Healthcare’s Health Systems Financials database. It has more than $750 million in long-term debt.
Dartmouth includes Dartmouth-Hitchcock Medical Center in Lebanon, New London Hospital, Cheshire Medical Center in Keene, Alice Peck Day Memorial Hospital in Lebanon, Mt. Ascutney Hospital and Health Center in Windsor, Vt. as well as Visiting Nurse and Hospice for Vermont and New Hampshire.
Manchester, N.H.-based GraniteOne reported $24.1 million in operating income on revenue of $546.2 million for the 15-month period ending Sept. 30, 2017, the most recent annual report available.
The reporting structure changed when the Catholic Medical Center in Manchester affiliated with the Huggins Hospital in Wolfeboro and Monadnock Community Hospital in Peterborough at the end of 2016. The system now operates under GraniteOne.
The organizations’ boards, the New Hampshire attorney general, federal regulators and Libasci must approve the merger.