Worcester Business Journal

14 Worcester Business Journal | December 11, 2023 | wbjournal.com FOCUS L A W & A C C O U N T I N G Hospitals' precarious condition Heywood's struggles with finances and now bankruptcy are just part of the fiscal crisis in inpatient health care BY ISABEL TEHAN WBJ Staff Writer W hen Heywood Healthcare, with its hospitals in Gardner and Athol, filed for bankruptcy on the first of October, it was not without warning that the system was in a tough spot. To start the year, UMass Memorial Health, the largest healthcare system in Central Massachusetts, elected not to go through with a planned merger with Heywood, citing a difficult healthcare environment. In June, the hospital abruptly replaced 12-year President and CEO Winfield Brown with two co-CEOs. Later that month, the hospital paused construction on its new $29-million surgical pavilion, citing a need to protect partner and community investments. Heywood is not alone in financial challenges. Last year was the most difficult in terms of overall hospital finances, according to the Massachusetts Center for Health Information and Analysis Acute Hospital Financial Performance 2022 report. Statewide, median acute hospital operating margin was -1.3%. So far in fiscal 2023, 71% of reporting hospital health systems experienced negative operating margins, according to CHIA data. "Hospitals in Massachusetts and across the country remain under extreme financial pressure," said Daniel McHale, vice president of healthcare finance and policy for the Massachusetts Health & Hospital Association. Losses in revenue and increased expenses have been an accumulating problem since the start of the COVID pandemic, said McHale, and how each hospital navigates viability under the climate has to be tailored. Central Massachusetts is worse off than other parts of the state, said Dr. Eric Dickson, president and CEO of UMass Memorial, which is based in Daniel McHale, VP of healthcare finance and policy for Mass. Health & Hospital Association Winfield Brown, former CEO of Heywood Healthcare During its bankruptcy, Heywood Healthcare is keeping its facilities open, including Heywood Hospital in Gardner. PHOTO | CHRISTINE PETERSON

• Cover