ITHACA, NY — Cayuga Health and Arnot Health, two of three medical systems serving the Southern, Finger Lakes and Central New York regions, announced Tuesday that they will affiliate under a new entity, Centralus Health.
Like Cayuga and Arnot Health, Centralus Health will operate as a nonprofit medical institution, with a board of directors comprised of members from both systems. Cayuga and Arnot Health will remain intact under the control of parent company Centralus.
Centralus Health supervise $1 billion in medical services provided in nine counties in the Twin Tiers region of New York and Pennsylvania.
Dr. Martin Stallone, CEO of Cayuga Health, will become CEO of Centralus Health. Arnot Health CEO Jonathan Lawrence will become executive vice president of Centralus. Stallone and Lawrence Cayuga will retain their current roles as CEOs of their respective systems while taking on new roles.
Five hospitals in the regions will operate under the new entity: Cayuga Health’s Cayuga Medical Center in Ithaca and Schuyler Hospital in Montour Falls, Arnot Health’s two hospitals in Elmira – Arnot Ogden Medical Center and St. Joseph – as well as Ira Davenport Hospital. Bath Memorial Hospital.
Stallone said there would be “no clear, visible change” in the care patients receive from their current providers at the press conference announcing the news Tuesday.
“Care in every locality should be emphasized,” Stallone said. “On the contrary, more care will become available over time.” He said the newly consolidated staff is “already planning for increased access to primary care in Chemung and Tompkins counties.”
The announcement came after regulators at the New York State Department of Health (DOH) approved the affiliation after “a good 14 months” of deliberations, Stallone said.
Executives from Cayuga and Arnot Health announced they were “exploring a collaborative relationship” in an April 14, 2023 statement.
It was not until December 9, 2023 that leaders announced they would seek regulatory approval from the DOH to begin the transition. Lawyers applied on January 12, 2024.
In the request, which The Voice of Ithaca Obtained through a Freedom of Information Act request, executives cited financial concerns as the primary motivation for seeking the new arrangement.
Cayuga Health has expanded its reach and services in recent years by partnering with and acquiring several small local medical practices and nonprofit organizations, including the Ithaca Nursing Department and Tompkins County, Dryden Family Medicine and Ithaca Family Medical Associates, among others.
In addition to two hospitals, Arnot Health operates more than 40 medical practices, all of which will be consolidated under the sprawling Centralus Health umbrella.
The application submitted to the DOH includes a letter of support signed by the five state elected officials representing the districts served by the medical systems.
The letter details the economic consequences that the rejection of the application would cause in the years to come. Left to operate individually, “each entity individually could face a downward financial projection (…) and possibly cause its closure”.
Cayuga and Arnot Health are two of the area’s largest employers, the letter states. Together, they employ 6,500 people whose jobs could be at risk if state regulators deny their request to formally share resources.
“Under this new structure, each system will remain intact and dedicated to its missions of serving its local communities,” the letter states. “We support this affiliation to financially stabilize the entities, keep health care workers employed, and maintain equity-focused health services in the region.”