A potential new national model for smaller healthcare systems

SEPTEMBER 15, 2014

Harrington-Heywood alliance a model for health care?

TARYN PLUMB

There's no question that the health care landscape is shifting — for patients, doctors and medical centers, as well as insurers.

As one way to adapt, Harrington HealthCare System in Southbridge and Heywood Hospital in Gardner have formed a partnership that is the first of its kind in the state, and, according to experts and those involved, could serve as a local and national model for community healthcare systems.

The two systems — which together comprise three hospitals, along with outpatient facilities, medical office buildings, physician groups, satellite facilities and free-standing treatment centers — have established a management services organization: Community Healthcare Partners. It will enable the two entities to pool and manage patient care, opening up new opportunities to negotiate contracts with insurers, ultimately lowering costs.

In a statement, Harrington's president and CEO, Edward H. Moore, said Community Healthcare Partners will allow both Harrington and Heywood to share overhead and be more effective in collecting data and evaluating risk-based contracts, "something that larger health-care organizations are able to do on their own."

'Keeping care local'

Mergers, acquisitions and affiliations of larger medical centers are nothing new in health care, but "this is unique in that it's two smaller community hospitals coming together," said Lynn Nicholas, president and CEO of the Massachusetts Hospital Association. "This will help them in their goal of keeping care local."

Led by CEO Douglas Crapser — formerly Harrington's chief operating officer — the company will develop and provide various services to support population health management strategies, which it says is required by risk-based health insurance contracts, which reward or penalize providers based on patient treatment outcomes.

As explained in a release from Community Healthcare Partners, insurers are increasingly asking health care organizations to establish more efficient health-care models that minimize consumers' cost and link payments with outcomes. The partnership will allow both organizations to "enhance the quality and effectiveness of care at the community level," which includes integrated provider systems.

The company has also been established in such a way as to foster growth through additional partnerships with other community health care systems.

As it moves forward, it will take advantage of a $442,303 grant from the state's Executive Office of Health and Human Services to help its development. That money, according to the corporation, will be used to hire staff, evaluate infrastructure resources, enhance quality and performance, and engage and educate the roughly 300 physicians who are part of the joint system. (Despite the boost from one state agency, another, the Health Policy Commission, has requested more information from the two organizations.)

National model?

"This newly formed organization will strategically align both (Harrington and Heywood's) managed-care services and work to help position the two systems as a national model for community partnership and collaboration," Moore said.

Moore's counterpart at Heywood, Winfield Brown, agreed that "we are empowering our joint provider network to optimize their success in the new health care paradigm. By leveraging joint resources, our physicians will be better able to meet emerging accountable care requirements, while providing enhanced wellness-focused, quality services to our patient base."

Nicholas noted the benefit of joint management and expertise, data gathering and quality reporting, as well as the new ability to enter into risk-based and managed-care contracts that either system could not perhaps have done alone. Ultimately, a larger pool of patients minimizes risk — because risks rise with smaller groups — and lowers the overall cost of health care.

"When you are a smaller hospital, it is harder to build that infrastructure on your own," she said. This model keeps "more care local and at a lower cost.”

Will other community-based health systems pursue something similar? Nicholas thinks that could happen.

"I anticipate that this model might attract the interest of other smaller community hospitals of Central or Western Massachusetts," she said, although she noted that she wasn't aware of other collaborations in the works. "The concept behind this is applicable to all hospitals and their physician groups who are trying to do more global payments with private payers and MassHealth." the state-run insurance program for low- and moderate-income residents.
Again stressing the unique model, she said, "This is not a merger or affiliation of hospitals. It's an ideal situation to share resources to benefit the communities of both hospitals."

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