The Butler Health System and Ellwood City Hospital have announced a five-year management agreement to reduce costs and to learn from each other.

Ken DeFurio, BHS president and CEO, and Ray Beck, ECH president and CEO, said through 18 months of discussions and six months of board negotiations, the two organizations worked to achieve this agreement.

As for what it will mean for each, Beck said they will share information and look for ways to “leverage resources. Yes, Butler has more depth of resources, but we want to make sure we are using all resources on a daily basis to the best of our ability, including administrative functions and clinical applications that are quality and not just quantity.”

There is no fee involved with this agreement. BHS is not paying Ellwood City, and Ellwood City is not paying BHS.

“Instead, Ray (Beck) will become a member of our senior executive team while remaining president and CEO of the Ellwood City Hospital,” DeFurio said, adding that both boards of directors also will remain independent.

“This is not a merger or acquisition,” DeFurio said. “It is a pretty simple strategy to work together to find ways to reduce costs and improve patient care.”

The agreement will go into effect July 1.