About three years ago Marna Borgstrom, M.P.H. ’79, president and CEO of Yale-New Haven Hospital (YNHH), and Christopher O’Connor, then the newly appointed president of the Hospital of Saint Raphael (HSR), began meeting over lunch to explore synergies that would allow the two hospitals to provide the best possible health care to the New Haven community. Both executives saw advantages in collaboration over competition. “We talked about ways we could work together,” Borgstrom said.

Both CEOs, however, had other concerns on their minds. More than 90 percent of YNHH’s beds were occupied, straining its capacity. The only place to build was upward, but a new patient tower would cost about $650 million and take up to seven years to construct. Six blocks away, HSR was spending more than it was taking in—about 70 percent of its patients were on Medicaid or Medicare. Over time the two CEOs came to recognize that a partnership made sense for both institutions.

On September 11, O’Connor and Borgstrom, surrounded by staff from both hospitals, elected officials, New Haven’s mayor, and representatives of the Sisters of Charity of St. Elizabeth, signed a document that made official YNHH’s purchase of Saint Raphael’s. At one minute after midnight the next day, HSR became the Saint Raphael Campus (SRC) of YNHH, which absorbed 3,400 of its employees.

The solution for HSR, said O’Connor, “was to partner with a hospital that was already well known to our staff and physicians. It will drive efficiency and effective use of medical resources. It will address financial challenges we face while providing an innovative opportunity to invest in services right here in New Haven.”

“We believe that as one unified hospital, we’ll be able to enhance access to high-quality health care resources in a more cost-effective manner,” Borgstrom said. “This integration will be critical to meeting the extraordinary health care challenges that lie ahead.”

To judge by those present at the ceremony in a YNHH auditorium, the acquisition is a win-win for all. Under the terms of the agreement YNHH paid $160 million for HSR. With only 300 of HSR’s 511 beds occupied, YNHH has more room for patients. Most jobs at HSR will be preserved—though about 200 layoffs, mostly in administration, are expected. The agreement maintains HSR’s Catholic values and traditions, which have been in place since it was founded by the Sisters of Charity in 1907. The transaction turned YNHH into one of the largest hospitals in the country, with 1,519 beds.

“As we conducted our deliberations as a board, it became clear that the integration of these two hospitals would provide a unique chance to reshape the delivery of health care in the state,” said Joseph Crespo, chair of the board of YNHH. “Not only that, with the wave of health care reform that is sweeping our nation, we felt that this could serve as a model for the nation as well.”

Mayor John DeStefano Jr. cited the importance of the two hospitals and the School of Medicine to the city—New Haven has 11,600 jobs in medicine as well as 42 bioscience companies. “The combination of medical school and clinical practice of the hospital is essential to not just the city’s economic well-being, but to the state,” he said.

But for the staffs of both hospitals, the heavy lifting was just beginning as they integrated two hospitals with different ways of doing things. Decisions to be made ranged from the mundane—where to find bed linens and cafeteria trays—to such complex topics as new reporting relationships for medical staff, media policies for communications officers, and seniority and job descriptions. Also on the agenda is expanding the planned implementation of an electronic medical records system at YNHH to cover HSR. In the runup to the acquisition more than 1,300 policies and procedures were standardized.

At the time of the signing it was not yet clear which departments would be headquartered in which hospital, though emergency departments and intensive care units will remain open in both. A command center was set up at SRC to answer questions that might arise. The center also ensured that such essential services as patient care, admissions, medical records, purchasing and supplies, support services, information technology and telephones, and payroll and billing will continue without interruption.

Aiding in the transition, noted O’Connor, who became executive vice president and COO of the Yale New Haven Health System, are strong ties between the two hospitals. About 80 percent of HSR’s physicians were already accredited at YNHH. The chief of staff and senior vice president for medical affairs at YNHH, Peter N. Herbert, M.D. ’67, had previously served as chair of the department of medicine at HSR. Alan Kliger, M.D., a senior vice president at Saint Raphael, has also worked at Yale, where he served on the clinical faculty and is now a vice president and chief quality officer of the Yale New Haven Health System.