OLEAN — Olean General Hospital officials said Friday the
decision to replace their longtime Olean anesthesia services provider with a
larger Buffalo provider will save millions of dollars, and that they have no
concerns about a federal fraud conviction against one of the Buffalo provider’s
former doctors.
After previously opening up its anesthesia services for
bids, OGH informed Southern Tier Anesthesiologists Wednesday it has accepted a
contract offer from Great Lakes Anesthesiology that will start once Southern
Tier Anesthesiologists’ contract expires Jan. 1.
Southern Tier Anesthesiologists, which owns a property at
202 N. Barry St., had serviced OGH since the physician group’s inception in
1994 and exclusively serviced the hospital for about the last 15 years.
Dennis McCarthy, vice president of marketing and
communications for Upper Allegheny Health System, told the Olean Times Herald
Friday that while both Southern Tier Anesthesiologists and Great Lakes “provide
high-quality, safe care,” the “economic portion” of the two groups’ proposals
“were very different.”
While unwilling to disclose exact figures, McCarthy said the
hospital will save “several million dollars” during the life of the multi-year
contract with Great Lakes, adding those are savings that can’t be ignored in
such “rough times” for rural hospitals nationwide.
“We’re financially challenged,” McCarthy said. “Savings like
this are really important to a hospital that’s barely breaking even and the
entire community depends on for jobs.”
OGH, which is a member hospital of Upper Allegheny, reported
a total revenues of approximately $112.5 million and total expenses of $115.7
million in 2016, leaving a $3.2 million negative bottom line.
OGH officials said at an April community breakfast they
opened 2018 with a $1.8 million “negative arbitrage,” meaning there was a
higher interest on carried debt than return on the funds.
However, they stated at that same event they believed Upper
Allegheny’s affiliation with Kaleida Health will help fight the negative arbitrage,
and the affiliation, approved last year, will eventually be worth $10 million a
year.
McCarthy noted a recent Becker’s Hospital Review story that
found at least 11 hospitals have been forced into bankruptcy and closure so far
in 2018.
“If you say, ‘I got several million dollars worth of savings
that I’m just going to forgo,’ that’d be a shame on you as a hospital because
nobody's got that kind of money to just float around,” he said.
THE FRAUD CASE against a former Great Lakes anesthesiologist,
who was sentenced in 2015, “has no relevance now,” according to McCarthy.
Great Lakes was formerly CGF Anesthesiology Associates, but
the name changed after one of its anesthesiologist was charged with being a
part of a scheme to defraud the University of Rochester out of $1.46 million.
According to federal prosecutors in Buffalo, Dr. Doron
Feldman received $630,000 by causing the university's Department of
Anesthesiology to pay $1.46 million in fraudulent fees from 2008 to 2010. CGF
had a contract with the Department of Anesthesiology during that time.
According to reports by the Rochester Democrat and
Chronicle, Feldman, 57, of Williamsville, was also the founder and president of
CGF.
He was convicted of conspiracy to commit mail fraud and
filing a false tax return, sentenced to 24 months in federal prison and
terminated by CGF.
A co-defendant, university program administrator Debra
Butler, was convicted of conspiracy to commit mail fraud and money laundering, and
sentenced to 36 months.
McCarthy said Feldman betrayed CGF, now Great Lakes, and
noted the group itself was never charged. He also noted Great Lakes serves
Oishei Children’s Hospital of Buffalo as well as fellow Upper Allegheny member
hospital Bradford (Pa.) Regional Medical Center.
“In the end, these folks at Great Lakes are good people,
they really are,” he said. “We have them at Bradford, and the surgeons down
there who work shoulder-to-shoulder with them, they’re delighted with the
group.”
