Worcester Business Journal

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The assurance your business needs to succeed. That's Preferred. I n fiscal 2014, Saint Vincent Hospital was the most profitable outside of Greater Boston at $65.2 million. Saint Vincent, which was repurchased by Dallas for-profit operator Tenet Healthcare in 2013, trailed only Lahey Hospital in Burlington, which made $67.2 million last year. While other Central Massachusetts hospitals produced margins in the single positive digits, Saint Vincent's margin was 15.6 percent. UMass Memorial Medical Center had a much slimmer 1.3 percent total margin and posted a $19.8 million surplus last fiscal year. In fiscal 2015, Saint Vincent maintains its lead. Through June 30, St. Vincent made $32.8 million while UMass Memorial made about $30 million, and the disparity is even larger considering St. Vincent was only six months through its fiscal year while UMass was nine months in. CEO: It's about efficiency Saint Vincent CEO Steven MacLauchlan said it's a game of effi- ciency. Its ownership by Tenet supplies robust management resources for lean strategies and control of purchasing costs. MacLauchlan said in contracting with commercial insurance companies, Saint Vincent tends to agree to payments that are slightly lower than average, landing them in a lower-cost category for pri- vately-insured people. Pricing information is not publicly available. Tenet originally bought Saint Vincent from the Diocese of Worcester but then sold it to Vanguard Health System in 2004. Tenet then rebought the hospital, along with the MetroWest Medical Center in Framingham, in 2013. The hospital also takes a conservative approach to expanding facilities and services, said MacLauchlan. That's been true since before the Tenet purchase in 2013. MacLauchlan, who joined the hos- pital as CEO around the same time, said there was a conservative expansion strategy under former owner Vanguard Health Systems, as well. "We really spend a lot of time before deciding whether we're going to go into a program … because overhead is very expensive," MacLauchlan said. Some services Saint Vincent has entered into in recent years include min- imally invasive heart surgery known as TAVR, oncology services at its new Cancer & Wellness Center, and orthope- dic services. The hospital also has some brand power that makes it the hospital of choice for many in Greater Worcester. At 120 years, the hospital has been a consis- tent provider for generations of local families, MacLauchlan said. A bit of history Dr. Mark Stoker, chair of surgical spe- cialties at Worcester-based Reliant Medical Group, describes Saint Vincent as a hybrid between a community hospi- tal and a large, academic medical center. It's large enough to offer sophisticated services, such as minimally-invasive sur- gery, but small enough to stay nimble. Large academic medical centers are, by definition, relatively inefficient, Stoker said, and patients sometimes find them downright daunting. Reliant and Saint Vincent were for- merly affiliated when Reliant was known as Fallon Clinic, leading to a strong rela- tionship between the two organizations. Stoker said Reliant doctors generate about half of Saint Vincent Hospital's patient volume. He recalled the time about two decades ago when Tenet took ownership of Saint Vincent for the first time from the Diocese of Worcester. At the time, the hospital infrastructure was ailing and other local hospitals were struggling and closing. Stoker said there was a lot of angst about a for-profit takeover, but thinks Tenet has been a good steward of the hospital. He noted that representatives from the Worcester Diocese remain on Saint V is region's most profitable hospital BY EMILY MICUCCI Worcester Business Journal Staff Writer Number of beds 314 724 Annual ER visits 63,969 134,891 2014 operating margin 15.6% 1.1% 2014 profit/surplus $65.2 million $19.8 million Disproportionate share hospital?* Yes Yes Commercial payer price index level** 50th percentile 76th percentile Saint Vincent UMass Memorial Hospital Medical Center A Tale of Two Hospitals Source: Center for Health Information and Analysis *Disproportionate share hospitals are those that receive federal funding to pay for the treatment of indigent patients **Commercial payer price index is a measurement of a hospital's relative price compared to other providers >> Continued on Page 24

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