UMass Memorial Health Care marks 20 years

Photo/Grant Welker UMass Memorial Medical Center's University Campus in Worcester. The campus is part of what is now the largest employer in Central Massachusetts.

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By Grant Welker

Two decades ago, the Worcester hospital industry entered a new era at a time when independent hospitals were still fairly common. Memorial Hospital and UMass Medical Center became one entity, a marriage that took years to feel natural and one that forever changed health care in Central Massachusetts.

At the time, officials from both UMass and Memorial portrayed the marriage as one born of necessity, with high insurance costs and an anticipated heightened competition from Saint Vincent Hospital’s new $215-million downtown Worcester campus. A merger between two local entities was called more ideal than one in which a larger partner would come in to swallow one or both hospitals.

“There’s nothing like the threat of a provider in Boston coming in than to get two rivals to come together,” said Douglas Brown, the president of UMass Memorial Community Hospitals and the network’s chief administrative officer.

State officials quickly backed the deal in 1997, and the merger was complete by the end of March 1998. The deal made what was reported to be the second-largest such hospital system in the state behind only Boston-based Partners HealthCare.

Two decades ago, the hospitals brought a combined $640 million in annual revenue and 700 hospital beds into the newly born entity. Today, revenue has ballooned to $2.5 billion, and the UMass system has more than 1,000 beds.

“It’s come a long way, and it’s changed dramatically,” said Dr. Stephen Tosi, the chief medical officer for UMass Memorial Health Care and the chairman of the surgical department at Memorial Hospital at the time of the merger.

“We were much smaller then (after the merger). We’re a system now,” he said.

The merger hasn’t made UMass Memorial Health Care immune from industry challenges, of course, even from the start. Later in 1998, UMass eliminated roughly 100 middle-management jobs that were suddenly duplicitous. The next year, UMass closed PrimeMed Immediate Care Center in Fitchburg because it was losing money, and transferred patients to its other sites.

But the fledgling health system was also making investments. At the time it was created, the network was on the cusp of building a new inpatient facility in Leominster, expanding operating room capacity at Marlborough Hospital, and adding a cancer treatment facility in Fitchburg.

UMass has made other changes more recently.

The system closed psychiatric beds at its University Campus last year but is planning a 120-bed psychiatric hospital to open in Worcester next year. This year, it announced closures of Plumley Village Health Services, endoscopy services at Clinton Hospital, inpatient pediatrics and a cardiac rehabilitation unit in Leominster, and urgent care in Fitchburg.

Still, UMass finds itself among the major players in Massachusetts health care. It has one of just five burn centers in the state, one of nine level-one trauma centers and one of just six academic medical centers, and the only one outside Boston. The number of medical interns and residents it educates places fourth in the state.

A history of mergers, and more that could come

The merger of UMass Medical Center and Memorial Hospital was a momentous turn in both hospitals’ histories, but consolidations have become the norm in health care, including in Massachusetts.

The number of hospitals statewide is now about 65, half the number of a half-century ago and a trend likely to continue, said Alan Sager, a professor in Boston University’s School of Public Health. Sager has doubts about whether cost savings have resulted in better patient care or simply better bottom lines.

“We have to ask,” he said, “who is that good for?”

In the past few years, Lowell General Hospital and Tufts Medical Center combined under a new company called Wellforce, and then added Melrose-Wakefield Hospital and Lawrence Memorial Hospital.

In a much larger potential merger, Beth Israel Deaconess and Lahey Health of Burlington await approvals from the Health Policy Commission and the state attorney general.

Mergers today are often a response to price pressures from the Affordable Care Act, as the way reimbursements are made to hospitals has changed, said Paul Hattis, an associate professor of public health and community medicine at Tufts University School of Medicine. Recent years mark a second wave of mergers after the 1990s, when insurers started getting an upper hand in price negotiations with providers, spurring hospitals to merge in order to gain purchasing power, he said.

“The evidence isn’t yet there that we’re getting that much more quality” from hospital mergers, Hattis said. “But what we do get is high prices. It remains to be seen that it’s all going to work out.”

Even financially viable smaller hospitals remain susceptible to takeovers, analysists said. Still, some independent hospitals remain in Massachusetts, and they appear to be surviving well. Most of them, including Harrington Hospital in Southbridge and Milford Regional Medical Center, have been profitable in each of the last three years.

Anniversary a chance to look back

Memorial Hospital joined UMass only months after UMass teamed up with HealthAlliance, which owned hospitals in Leominster and Fitchburg that themselves merged in 1993. UMass’ bid was chosen over a larger one by Tenet Healthcare, which owns Saint Vincent Hospital and MetroWest Medical Center.

HealthAlliance’s hospitals joined to a growing UMass roster that already added hospitals in Clinton and Marlborough in 1995.

With Memorial Hospital on board, the UMass Memorial Health Care network was official. The HealthAlliance and Memorial mergers with UMass were complete within one month of one another in early 1998.

For Tosi, whose medical career in Worcester started in 1977, the 20-year anniversary of the system offers a chance to look back on changes to Worcester’s health care industry.

At the start of Tosi’s career, he said, Worcester had seven hospitals: UMass, Memorial, Saint Vincent, Worcester City Hospital, Hahnemann, Doctors Hospital, and Fairlawn Hospital. By the late 1980s, Hahnemann and Memorial merged with Holden Hospital.

Worcester City Hospital’s former campus is now Community HealthLink, a UMass-affiliated treatment center. Doctors Hospital is now AdCare Hospital, which offers addiction treatment services. Fairlawn is now a physical rehabilitation facility.

Community HealthLink and Fairlawn are both affiliated with UMass Memorial Health Care, and the Hahnemann campus has outpatient services for UMass.

What are now UMass’ University and Memorial campuses have finally felt more like one in recent years under the tenure of Eric Dickson, the president and CEO of UMass Memorial Health Care since 2013, said Debbie Cox, the manager for intra-hospital transfers at UMass Memorial Health Care, whose career began 50 years ago at Memorial.

“It was two totally different cultures,” Cox said of Memorial’s history as a community hospital, and UMass’ history as a teaching hospital.

“For too long, we were two different silos,” she said.

“Those at Memorial felt like they were being taken over by UMMC, and the UMMC felt like they were being taken over by Memorial,” added Tosi, whose career started at Hahnemann. “Now, most aren’t from one of those formative institutions. They came after the merger.”