Photo | Grant Welker
UMass Memorial Health Care's University Campus in Worcester
January 29, 2020
Harrington HealthCare to join UMass Memorial
Photo | TMS Aerial Solutions
Harrington Hospital in Southbridge
By Grant Welker
Harrington HealthCare System has signed a letter of intent with UMass Memorial Health Care to join the hospital system, which is Central Massachusetts' largest employer.
Board of trustees for both systems have approved the agreement, UMass administrators said in a memo to staff caregivers Wednesday. State regulatory approval is needed before the deal becomes official.
Regulatory reviews are expected to take six to nine months, UMass President and CEO Eric Dickson and Chief Administrative Officer Doug Brown said in the memo.
Harrington HealthCare includes the 142-bed Harrington Hospital in Southbridge, a satellite campus in Webster, and other medical office locations, along with primary care and physician groups.
The potential merger comes as health systems increasingly work to find cost efficiencies to balance out rising costs of treating patients. In December, UMass reported a $10-million loss for fiscal 2019 and announced it sold a pharmacy management services joint venture for $263 million to help with needed equipment and facility upgrades.
[Related: UMass, Harrington were both on search for new partners]
The Worcester Business Journal reported this month UMass has cut spending on its executive ranks by more than half in the most recent five years on record, and has reduced its total employee count by 8% during that time.
Harrington has been among the region's fastest-growing healthcare employers, growing its staff size by 14% in the last five years. The system is led by CEO Edward Moore.
Last spring, Harrington and Heywood Healthcare in Gardner joined the Massachusetts Value Alliance, a group meant to increase each hospital's purchasing power to lower costs.
The Harrington system reported breaking even in its most recent annual report in September, with a $12.1-million gain at the hospital offset by a loss of the same size in its physician group. Its occupancy rate of 39%, however, was just over half that of its cohort average, according to the Massachusetts Center for Health Information and Analysis.
Dickson and Brown said UMass was looking to add Harrington because of the two systems' shared charitable missions, similar goals for improving quality of care and patient safety, and commitment to meeting the needs of their communities. UMass' medical group could also help recruit and retain physicians in Harrington's service area, they said.
The two systems already collaborate, including through a system allowing Harrington care providers to consult remotely with UMass Memorial specialists in caring for critically ill patients. If the merger is approved, Harrington will be brought into UMass' electronic health record system.
State data shows the two hospital systems have very little overlap today in where their patients live, with Harrington drawing overwhelmingly from Southbridge and Webster.
The UMass system began in the 1990s, with UMass Medical Center taking over Clinton Hospital and Marlborough Hospital in 1995, and Memorial Hospital in Worcester and HealthAlliance hospitals in Leominster and Fitchburg in 1998. UMass sold Wing Memorial Hospital and Medical Centers in Palmer to Springfield-based Baystate Health in 2014.
Harrington has remained as one of few Massachusetts hospitals to remain independent. Others include Heywood Hospital, Milford Regional Medical Center and Emerson Hospital in Concord. Harrington said in a statement Wednesday it formed a committee in 2018 to look into longterm options to remain financially secure.
“There are significantly fewer independent hospitals in the Commonwealth, and the country, compared to 20 and 30 years ago,” Moore said in a statement. “We are in a fortunate position in that we are a strong organization with an outstanding medical staff, talented employees and great community support; we wanted to take the reins to shape our own future.”
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