BILL FARRELL
Observer-Dispatch

For Christmas three years ago, Keith Fenstemacher's family gave him a history book about Utica.

With more than 30 years experience in the health care industry, most of it in Utica, and a history buff to boot, he found the chapter on the city's hospitals particularly interesting.

A century ago Utica had six hospitals. Today there are two: St. Elizabeth Medical Center and Faxton-St. Luke's Healthcare.

"I was reading the book a week before the official consolidation of Faxton and St. Luke's hospitals," said Fenstemacher, who was heavily involved in that move as president and CEO of Mohawk Valley Network Inc., which oversees both.

Now Fenstemacher, who took over Jan. 1 as president and CEO of Faxton-St. Luke's Healthcare, is shepherding through the latest change there -- an approximately $16 million clinical consolidation of programs and services at both campuses located just about a mile from each other.

The result will mean one acute care, inpatient facility at the St. Luke's campus in New Hartford, one primarily outpatient facility at the Faxton campus in Utica, and one long-term care facility at St. Luke's Home, on the St. Luke's campus.

Faxton-St. Luke's Healthcare has about 2,700 full- and

part-time employees, making it Oneida County's second largest employer, behind the Oneida Indian Nation's enterprises, including Turning Stone Casino Resort in Verona.

Hospital officials are hoping for state approval by April of two certificate of need applications, which will enable them to seek bids on the project. Approval from the town of New Hartford is also needed.

They believe the earliest the consolidation will take place -- when construction is completed -- is summer or fall 2004, and that it will help the Faxton-St. Luke's health care system save approximately $2 million annually.

No jobs will be eliminated by the planned reconfiguration, Fenstemacher said.

"We saw that there was going to be a continual shrinkage of resources in the health care system," he said in explaining the consolidation decision. "We had to figure out a way to allocate the tools we have in the best possible fashion."

Not unlike other hospitals, Faxton-St. Luke's is having a "significantly difficult time" recruiting highly specialized surgeons to the community because there's a national shortage, Fenstemacher said. There's also a shortage of trained technical staff and nurses.

In addition, the cost of continued development of facilities, equipment and high technology was prohibitive.

"We could no longer anticipate having the ability to put CT scanners at one site and a MRI machine at both sites. We had to think about centralizing the resources," he said.

"We (also) knew that federal and state budget requirements were going to cause cutbacks and shrinkages in the reimbursements formulas to pay us in caring for the patients."

The 59-year-old Fenstemacher succeeded Andrew Peterson at the helm of Faxton-St. Luke's Healthcare after Peterson retired. The two had worked together on regional health care issues a number of years. Fenstemacher was president/CEO of Faxton Hospital before becoming president of MVN in 1998.

Natalie Brown, chairman of the Faxton-St. Luke's board, said the board and Fenstemacher value the relationship they have with the hospital medical staff, and it's important to build upon that as the consolidation moves forward.

"Keith's leadership, his understanding of strategic planning and his ability to maintain a strong working relationship with the medical staff make him well suited for the job," she said.

Fenstemacher will continue to serve as president of MVN, of which Faxton-St. Luke's is an affiliate. He figures the majority of his time will be spent at the hospital.

"I've been out of the hospital setting for five years, doing broader integration of services," he said.

"Since taking over this job, I've been making rounds, visiting departments, learning about hospital operations, just getting reintroduced and seeing what changes have to be made to get the plan implemented."

There are challenges to that as well.

"When I left Faxton, it was a 160-bed hospital. Now it's all been redefined and re-done. Sometimes when I walk through the halls I go the wrong way," he said with a smile.