North Central Hospitals Buck The Trend Of Joining Larger Systems
In 2009, Athol Memorial Hospital announced it was working on an affiliation deal with Vanguard Heath Systems. If that deal had gone through, making the tiny, 25-bed facility part of a national, for-profit system, it would have been in line with a major trend in Massachusetts health care. Over the past couple of years, well-financed, for-profit upstart Steward Health Care System has taken over 12 Bay State hospitals, and Partners HealthCare System is working on buying up South Shore Hospital in Weymouth.
But that's not what happened. Instead of joining Vanguard, Athol Hospital is teaming up with Gardner's Heywood Hospital. Under a deal announced last April, the two hospitals formed North Central Healthcare, a system led by Heywood CEO Winfield Brown.
So far, Brown said, consolidation efforts have included bringing the trustees together so the same people sit on each hospital's board and on the board of the parent organization.
“We've been working to do some culture and integration work so we are very deliberate in how we put the governance together,” he said.
Michael Grimmer, a vice president at Heywood, is now leading the Athol campus as chief operations officer. Services like rehabilitation, laboratories and a hospitalist program (in which physicians provide general medical care for hospitalized patients) are being brought together. The hospitals are also working together on recruiting primary care providers and specialists, and they're preparing to merge their electronic medical records systems, a project Brown said will take about 9 months and cost $2 million.
Turning Athol Around
For Athol, the need for a partnership is obvious. The hospital has run losses since its 2009 fiscal year.
Grimmer said the new system already doubled its daily census thanks partly to the new presence of an on-site cardiologist. For such a small hospital, that brought the daily number only to 12, but it's working on additional growth, including adding “swing beds” that can serve people in short-term rehabilitation. Ideally, Grimmer said, the hospital might have 10 to 12 inpatients and 10 to 12 people in the swing beds at any given time.
“We'd love to be in the high teens, low 20s,” he said.
The new leadership is also working on revamping a troubled financial system.
“We're just starting to turn the corner here,” Grimmer said. “With Athol it was a revenue cycle that was really broken.”
Grimmer and Brown said the hospital had cut its financial staff to a point where it had trouble billing and collecting payments effectively. At the same time, as a small organization, it had little leverage bargaining with insurance companies, and didn't have anyone on staff to do that negotiation. Athol was the first or second lowest-reimbursed hospital in the state, Brown said.
Now, he said, the new management is working with the payers and has just negotiated a mid-contract agreement with Blue Cross Blue Shield of Massachusetts to improve the payments. But both North Central hospitals' compensation remains low.
With Vanguard no longer courting Athol, the hospital is cutting some ties to Saint Vincent Hospital, Vanguard's Worcester location. Hospitalist and emergency room programs at Athol will be shared between the two North Central locations instead of being managed by Saint Vincent.
But Brown said there has been no conflict between the merged North Central entity and the Worcester hospital, which still shares some of its specialists with Heywood.
“They have been very supportive to us in the transition and keeping their services here as long as we need them,” he said.
Saint Vincent spokesman Dennis Irish said the decision not to move forward with the Vanguard-Athol deal was based on both parties' analysis of the situation.
“We concluded the local relationship with Heywood was better for that region,” he said.
Still, questions remain about the viability of any small, independent players in the health care system.
“Most people believe that within a half a dozen years, there probably will be virtually no freestanding community hospitals that aren't part of systems in the commonwealth,” said Lynn Nicholas, president of the Massachusetts Hospital Association.
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