Southampton Hospital CEO Looks Forward to New Facility, Bright Future

Southampton Hospital’s plan to construct a new facility in Shinnecock Hills at the Stony Brook Southampton campus is about much more than having a state-of-the-art hospital building—it is part of a larger movement to provide superior medical services for the Hamptons now and into the future.

The community hospital is working toward merging with Stony Brook University Hospital to enable the move to the college campus and to cut costs and improve the breadth of medical care offered on the South Fork, among other benefits.

“I truly think this is going to make healthcare better for our community,” Southampton Hospital President and CEO Robert Chaloner says during a recent interview at his office.

Southampton Hospital has been an affiliate of Stony Brook since 2008.

Chaloner explains that the “relatively loose affiliation” allows the hospitals to share information back and forth, making it easier for patients being transferred. It also facilities some teaching programs, including Stony Brook medical students rotating through Southampton Hospital’s obstetrics department.

In October 2012, Southampton Hospital’s board and the State University of New York board, which oversees Stony Brook University, signed a letter of intent to go beyond a simple affiliation and fully merge.

“They’re the right partner,” Chaloner says. “They’re Suffolk County’s only academic medical center. We will strengthen them, they will strengthen us. It will be the beginning of a real network of healthcare services for Suffolk County.”

There would be one operating certificate—”like a barber’s license to cut hair,” Chaloner jokes—across both entities. Operating certificates are granted by the state, giving a board permission to run a hospital in New York.

This is the direction healthcare is going, according to Chaloner. “The days of little independent hospitals are really pretty much over. It’s getting harder and harder, just given the complexity of healthcare, the cost of healthcare, the ability to attract clinical talent…” he says. Though there are financial advantages to merging with Stony Brook, he says, clinical advantages are the primary reason. “This will give us access to better clinical resources, more of their teaching programs, and an ability to collaborate in a way that will boost healthcare much more strongly in our community.”

The deal will include Stony Brook setting aside space at the 82-acre Southampton campus for the new hospital building, though there is still much to work out and many documents that need to be in order before the various regulatory bodies sign off on the merger, Chaloner says. They have been working toward this ever since the letter of intent was signed. “I would characterize it as we’re very close at this point,” he says, with the caveat that putting together anything as complex as hospitals is difficult. “There’s added complexity because Stony Brook is not a private institution; it is a state institution,” he adds. That means extra levels of scrutiny and rigorous due diligence. “But so far, so good.”

He hopes the deal will go before the hospital board and SUNY board in the next couple months for approval. Then it will move on for formal filing with the New York State Department of Health and other offices.

“We’ve had a lot of meetings with them; we’ve had a lot of green lights,” Chaloner says. “We’re expecting that process to go very smoothly, but we still have to go through it.”

The agreement will include assurances that the local community will have a voice in the affairs of the hospital and the hospital will stay responsive to the community, he says. He explains that under the agreement “the Southampton Hospital Foundation will stay alive as a corporation and retain ownership over the physical assets and play a very active role in the oversight and the planning of what happens at the hospital.”

The contract should be done by the end of 2014, he says, though the regulatory approvals make take longer.

“We’re going to work very aggressively once the contract is signed to launch a capital campaign,” Chaloner says. The construction of a new facility will also be financed by selling the hospital’s existing facilities in Southampton Village and through borrowing.

Though Southampton Hospital is licensed for 125 beds, that is more than it currently requires and more than hospital officials anticipate needing in the coming years. The tentative plan for the new hospital is for between 80 and 100 beds. Rather than having two patients to a room, like most rooms in the existing hospital, the plan calls for one bed to a room, to provide patient privacy, with some oversized rooms that may be doubled up with beds when demand peaks.

While the number of inpatient beds will shrink, the new hospital will accommodate a growing area of Southampton Hospital’s services: ambulatory care. Last year was the first time the hospital brought in more revenue from outpatient care than inpatient care, and Chaloner sees this trend continuing.

Chaloner says he envisions that though there will be a new center for care at the college campus, patients will not have to travel there as much because services are being pushed closer to where people live. “It’s not just about a hospital,” he says. “I see it as a network of services for the South Fork.”

In addition to the hospital building, itself, Southampton Hospital also operates 21 separate offices and facilities scattered from Montauk to Westhampton. That includes primary care offices, urgent care centers, laboratories, radiology, a dialysis center and more. Chaloner wants to expand radiology services and improve cancer services, while continuing to grow laboratory services. The hospital is also looking into options such as doctors in Stony Brook remotely monitoring patients in Southampton.

Southampton Hospital recently became a landlord to Hudson River HealthCare, which is operating the Kraus Family Health Center of the Hamptons—a federally-qualified health center contracted with Suffolk County—in the hospital’s former nursing home. They have a 10-year agreement and the option is open for the health center to come with Southampton Hospital to the college campus. Chaloner says having a health center in close proximity is convenient because people who arrive at the hospital with a medical issue that does not warrant an emergency room visit can go to the center instead.

The health center will have two Southampton Hospital doctor of osteopathy residents and four Stony Brook medical doctor residents working there. Southampton Hospital also has residencies for osteopathic medicine at its Westhampton Primary Care Center.

“We’re training a lot of family practice doctors at this point, which is great,” Chaloner says. “That’s one of our goals—we need to have more primary care doctors in our community.”

The hospital’s plan is that if doctors put down roots in the community during their training, some will choose to stay and work on the East End after their residencies are complete. “That’s actually worked out,” he says. “We’ve seen that happen already.”

Four of the hospital’s nine hospitalists—doctors who don’t have practices and exclusively work at the hospital—are Southampton residency graduates, and there are graduates working in healthcare offices from Southampton to Montauk.

Chaloner expects programs for a number of health jobs will come to the Southampton campus, though he does not anticipate a medical school is in Stony Brook Southampton’s future.

Physical therapy and occupational therapy graduate health programs are at the campus now, and Stony Brook will add more. “They’re starting a medical health informatics program in the fall on the campus, and we’re going to be collaborating on those,” Chaloner says.

Once the merger deal is OKed, a capital campaign will be launched to raise money for the new facility. The project will also be financed through the sale of the hospital’s land and buildings in Southampton Village and through borrowing.

Chaloner would like to see the old hospital become a site for independent and assisted living. He says it could be spectacular for senior housing.