By PAUL KIRBY
Freeman staff
pkirby@freemanonline.com; twitter.com/PaulatFreeman

KINGSTON, N.Y. — Closing or significantly downsizing one of Kingston’s two hospitals is the route HealthAlliance of the Hudson Valley is likely to take to cut costs, the company’s board chairwoman says.

“That is the solution we are looking at today,” Cynthia Lowe said in a phone interview Tuesday afternoon.

Lowe’s comments came four days after HealthAlliance announced it was “actively pursuing a single-campus alternative” — an indication that one of the company’s two hospitals, less than a mile apart in Midtown Kingston, could close.

“We have to make changes to continue to grow and provide healthcare in this community,” Lowe said on Tuesday. “We have to reduce our overhead.”

Lowe said the fast-rising cost of healthcare and the sluggish economy are partly to blame for the need to consolidate.

Still, she said, the options being examined by HealthAliance would be a positive step for the local healthcare delivery system.

“What we are doing is maintaining healthcare in this community,” said Lowe, who has been chairwoman of the HealthAlliance board since March 2011.  “It may be on a smaller footprint, but we will maintain health care.”

“Sometimes courage hurts,” Lowe said, a reference to a recent comment by Northern Metropolitan Hospital Association President Kevin Dahill that closing one of Kingston’s two hospitals would be a “corageous” step.

Lowe, like other HealthAlliance officials last week, did not say which of the hospitals might close. She said a decision will be made by the board in the next several weeks.

If one of the hospitals does close, Lowe said, its building could be used for office space or other purposes. Continued...

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Lowe said the HealthAlliance board members — “volunteers who live in this community” — would not let either building become a blight.

Kingston and Benedictine hospitals, which are on Broadway and Mary’s Avenue, respectively, have been jointly operated by HealthAlliance since 2008. The state in 2006 threatened to close one of the two if they did not affiliate.

David Lundquist, the president and chief executive officer of HealthAlliance, said last Friday that closing one of the two hospitals is not yet a certainty and that the company has not decided which one to shutter, or when, if it becomes necessary.

He also said he did not know how many of HealthAlliance’s 2,400 employees would be affected by a shutdown.

Kingston Mayor Shayne Gallo has said closing one of the hospitals “would have a devastating impact” on Kingston. On Tuesday, Gallo said he is scheduled to meet this afternoon with Lundquist and other HealthAlliance officers to discuss the situation.

Like Lundquist, Lowe said Ulster County not being included in a more competitive metropolitan statistical area, or MSA, has severely hurt the hospital’s financial standing.

That inclusion, which must be approved by Congress, would result in significant higher Medicare reimbursement rates for HealthAlliance.

Lowe said Ulster County getting the same MSA designation as nearby Dutchess and Orange counties would have boosted HealthAlliance’s annual revenue by about $10 million, negating the need to consider closing a hospital.

“All we want is what our neighbors have,” Lowe said.

A spokesman for the New York State Health Department said on Tuesday that before HealthAlliance can close a hospital, it must submit a formal plan to the department and the department must approve it. So far, he said, no plan has been submitted.

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