State board gives positive reviews to UMass Memorial-Harrington acquisition

Photo | TMS Aerial Solutions Harrington Hospital in Southbridge

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By Grant Welker

The Massachusetts Health Policy Commission will not conduct a detailed review of market costs for a proposed merger between UMass Memorial Health and Harrington Hospital, based on preliminary findings the deal isn't likely to lead to additional costs for patients.

Those early determinations, described at a commission meeting Wednesday, provide a positive step for UMass Memorial and Harrington, which first said in January 2020 they planned to merge, making the Southbridge-based Harrington part of the Worcester-based UMass Memorial system.

Kate Mills, the commission's policy director for market performance, said the deal, which requires state regulatory approval, doesn't require a closer study of potential cost implications for Central Massachusetts patients. That's because of a few factors, including that UMass Memorial already provides services in Harrington's home market and because UMass already contracts for physician rates on behalf of most Harrington physicians.

Harrington has a relatively small size at 119 beds and has a small commercial insurance payer mix at 12.8%, according to the commission. Those factors are seen as unlikely to greatly affect bargaining leverage in the commercial market locally for hospital services.

For most major payers and for most services, Harrington's patient prices are also already typically at or above those of UMass Memorial's community hospitals, the commission found. In addition to its UMass Memorial Medical Center campuses in Worcester, UMass Memorial also has community hospitals in Clinton, Leominster and Marlborough. UMass Memorial has historically not sought to have consistent rates across its hospitals, the commission said.

The commission factored in UMass Memorial's plans, Mills said, for $42 million in capital expenditures at Harrington and for keeping existing medical services in place at Harrington for at least five years.

The Health Policy Commission is continuing to review other proposed healthcare deals, including a potential joint venture between Gardner-based Heywood Healthcare and Shields Health Care Group of Quincy to own and operate a state-licensed clinic for PET and CT scans and MRI services for Heywood patients.

The commission also voted Wednesday to set a health spending benchmark for the coming year at 3.1%, a default rate based on market costs and other factors.