“Difficult things take a long time, impossible things a little longer.” — Unknown

ONEIDA — Rural medicine is a tough gig. The local providers typically earn less pay, put in longer hours, and handle more patients than in an urban setting. The cost of technology and compliance are huge financial burdens, especially on a small facility. Attracting physicians, in particular specialists, is a daunting task. Compensating for ever-diminishing reimbursements is, to say the least, a daily challenge.

None of these challenges, however, has slowed down Oneida Healthcare, a medical complex located on State Route 5 in Oneida and operated by the not-for-profit corporation Oneida Health Systems, Inc. 

“Our mission has been the same since the hospital opened in 1899,” says Gene F. Morreale, president & CEO of Oneida Healthcare (OHC). “We provide the highest quality, progressive, and comprehensive care for the Oneida area and surrounding communities.”

Morreale makes his point by listing just a few of the recent innovations at OHC. “In February, we launched the navigational bronchoscopy program, which is a minimally invasive procedure to aid in the diagnosis for patients with lung lesions,” he says. “The system has GPS-like technology that creates a roadmap inside the lungs and permits us to guide tiny tools through the lungs’ pathways. The system allows the physician to take tissue samples and place markers for future treatment … Oneida Healthcare is the only hospital in the Mohawk Valley using this state-of-the-art technology.”

Morreale also points with pride to the “Oneida Robotic Surgery Program.” OHC’s da Vinci robotic-surgery team lays claim to completing more single-site gallbladder removals than any other hospital in the region. 

“We were the first hospital in the region to offer this technically advanced surgery,” continues Morreale. “We also offer a new standard in digital mammography, providing the lowest-possible dosage available in Madison or Oneida counties. This June, OHC anticipates helping to cut the ribbon with eight area doctors on a new ambulatory surgical center in Westmoreland. The joint-venture is designed to provide convenient outpatient services for pain management, orthopedic and sports medicine, spine, hands, and plastic procedures.”

Morreale is also overseeing discussions between OHC’s Women’s Health Associates (WHA) physician-practice members and Diane Temple, the widow of Dr. Paul William Temple who passed away on Jan. 18. Dr. Temple had practiced medicine in Rome since 1980. “[Our intent] … was to provide office coverage so that his patients would be able to continue to access quality GYN care in his [Rome] office while he received his [medical] treatments,” affirms Morreale. “Due to Dr. Temple’s recent death, that arrangement was not finalized, and Mrs. Temple has continued the discussions with the WHA physicians … Once negotiations conclude, the practice will continue as a full-time OB/GYN practice staffed by board-certified physicians from WHA. Plans are to start seeing patients sometime in April.”

Another challenge is the need to take over physician practices. “The health-care landscape is changing rapidly,” stresses Morreale. “Physicians are finding it difficult to operate small practices. Not only is their remuneration being reduced, but the burdens of compliance leave less time for patient care. There are also a number of doctors, who are just burned out by the pressures put on health-care providers. OHC’s commitment to providing health care locally mandates that we take over some practices to ensure that a full complement of services remains in the region. Just since 2012, OHC has taken over practices in obstetrics, primary care, neurology, and orthopedics. This is a huge burden to take on as reflected in the salary growth on our financial statements. We need to ensure that the care stays local so that the revenue can offset the expenses.”

OHC has come a long way from the original four-bed hospital launched on Williams Street in 1899. A few of the historical highlights include a school of nursing, which opened in 1907. In 1976, the community dedicated an acute-care facility on its current Genesee Street site. The hospital soon grew into a medical complex adding a skilled-nursing facility as well as expansion projects including a new emergency room, radiology department, pharmacy, and ambulatory surgical unit. In 1991, the hospital opened its first satellite facility in Camden. In addition to Camden, OHC now serves 24 communities with locations in Oneida, Chittenango, Verona, and Canastota. In 2008, it held a groundbreaking ceremony to commemorate the start of a $23 million construction project to build a two-story addition to the hospital and renovate existing areas that provided new operating rooms plus a new ICU.

Today, the campus includes a 101-bed, acute-care hospital and a 160-bed, skilled-nursing facility, in addition to a number of off-site, free-standing offices. The campus and its off-site locations encompass 285,000 square feet, the overwhelming majority of which is owned by the Oneida Health Systems, Inc. A real-estate holding company, Oneida Healthcare Corp., currently owns the skilled-nursing facility and one of the off-site locations. 

OHC employs more than 900 people (810 FTEs). There are about 185 members of the medical staff, of whom the majority is independent. The organization employs 142 registered nurses. In 2014, OHC generated $91 million in revenue. The original service area of Oneida city has been expanded over the years to include Madison and western Oneida counties, a population estimated at about 80,000. In 2014, the hospital admitted 3,318 patients, performed 809 surgeries, handled 158,653 outpatient visits, and treated 25,808 people in the emergency room.

Economic impact

Oneida Healthcare’s impact goes far beyond providing just health care. The system is also an economic engine that helps to drive the local community’s economy. A study released with the assistance of the Healthcare Association of New York State (or HANYS) in January 2013 estimated that OHC generated a total economic impact of $169.3 million (2012 figures). The total included $26.4 million in capital spending, $50.6 million in supply purchases, and $92.4 million in payroll. The report added another $14.3 million in federal, state, and local taxes. Direct and indirect payrolls supported 1,450 jobs.

Financial challenges

The high cost of new technology, doctors leaving their private practices, competition from other health-care providers in the region, and lower reimbursements have forced the Oneida medical complex to rethink its business strategy. “There’s no question that for OHC to not only remain competitive but also to thrive we need to provide a full continuum of care,” Morreale opines. “For example, we have plans to replace our long-term-care facility, initiate a PACE (Program of All-Inclusive Care for the Elderly) program, and possibly create an assisted-living facility. We have to continue acquiring doctors’ practices in order to offer the spectrum of health care and to maintain local access.

“The real challenge is that all of this development is occurring at the same time third-party payers are ratcheting down their reimbursements and changing the way they pay for services,” adds Morreale. “OHC recently joined an innovative Medicaid program called DSRIP (Delivery System Reform Incentive Payment) in which our funding is tied to meeting performance [metrics], such as infrastructure development, system redesign, clinical-outcome improvements, and population-focused improvements. The concept will soon include Medicare reimbursements, and third-party private payers are already following suit. The members of this integrated-delivery system must work together to reap the benefits of a $6.4 billion New York State fund to be distributed over five years. We are working on identifying the deliverables in the program, such as reducing emergency-room and inpatient admissions among the Medicaid population by 25 percent over the next five years.”

The financial pressures of the last few years to grow the OHC complex in a period of declining reimbursements have created operating losses. 

“Because of Medicaid cuts, observation-level payments resulting in lower rates, and additional costs associated with the implementation of a new information-technology system, we recorded a $2.5 million loss in 2012 and a $3.4 million loss in 2013,” laments Morreale. “At the same time, Standard & Poor’s lowered our bond rating a notch. With higher revenues and tighter cost controls, however, OHC reversed the recent trend by posting a $1.5 million surplus in 2014.”

Morreale credits the success of the simultaneous business-plan development and the turnaround to the OHC staff. “We have great employees,” he affirms, “including our leadership team.” In addition to Morreale as president & CEO, the team includes John D. Milligan, vice president (VP) of finance; Mary Parry, VP, operations; Dr. Dan Vick, chief medical officer; Janice Kohlbrenner, VP, clinical services; Michael Fifield, VP, human resources; and Bryan Ehlinger, administrator of long-term care. In addition to the leadership team, Morreale notes the support provided by outside professional corporations: Oneida Savings Bank and NBT for financial services, Fust Charles Chambers for accounting, and Hancock Estabrook for legal affairs.

Hiring challenges

OHC faces multiple obstacles as it navigates the turbid waters of health care, but none more difficult than attracting and retaining qualified employees. “Our challenge begins with finding experienced physicians,” says Morreale. “There is a lot of competition in this area from larger hospitals and huge doctor groups, which are willing and able to pay more than we can for specialists and even for primary-care doctors, due to their higher number of patients. We need to find candidates who grew up in a rural setting, particularly this region, and who have family ties here.

“OHC has had good success with the ‘Rural Medical Scholars Program’ run by SUNY Upstate Medical University,” continues Morreale, “which places third-year medical students in rural communities full-time for 19 or 36 consecutive weeks. We have scored well with this program building long-term relationships with these candidates. We also partner with Madison–Oneida BOCES to provide an outstanding educational opportunity for selected high-school seniors who are interested in the health profession. Students receive a first-hand, in-depth overview of the field and help in career exploration.”

OHC also has created extensive, internal training programs to encourage staff education for the employees. “My three decades in health care have convinced me that the best staff is … [comprised of] permanent employees. I have never been a believer in hiring temporary staff. That’s why we put so much emphasis on training and retention. OHC has two, full-time nurse educators and a well-equipped training lab. Our best success has come from training our staff the OHC way. Not only does the training produce qualified employees, but it also opens career paths for those who want to advance. I believe our emphasis on training helps to maintain a very low turnover rate: the rate for RNs is only 2.5 percent while the overall rate for the hospital is [just] 3.2 percent.”

OHC is supported by an independent foundation formed in 1971. The foundation makes annual gifts to support the medical complex by funding such needs as technology, nursing scholarships, and the recent hospital expansion. The endowment currently stands at $1.5 million. The foundation board is comprised of 19 community members.

Morreale brought decades of health-care administrative experience when he assumed his current post in 2007. From 1979 until 2007, Morreale worked at St. Joseph’s Hospital Health Center in Syracuse, most recently as the vice president of corporate services. He received his bachelor’s degree in health information management from Daemen College, located near Buffalo, and his M.B.A. in general management from Syracuse University. 

Morrele recognizes that “we are in a changing health-care environment which will require us to adapt.” He has no doubts that OHC is up to the task.