Worcester Business Journal

4 Worcester Business Journal • September 12, 2016 www.wbjournal.com U Mass Memorial Health Care, the largest C entral Massachusetts health system, announced last month it is exploring a merger between its two hospitals in North Central Massachusetts: UMass Memorial - Clinton Hospital in Clinton and UMass Memorial - HealthAlliance Hospital in Leominster. "We anticipate that the potential merger of two UMass Memorial hospi- tals will ensure longevity and expansion opportunities for each organization, including emergency department, inpa- tient and outpatient volume," UMass spokeswoman Debora Spano said. The possible merger was announced shortly after a report from the Massachusetts Center for Health Information and Analysis found Clinton Hospital lost $1.2 million in the 2015 fiscal year, while HealthAlliance posted $7 million in profits. In July, CHIA reported that Clinton Hospital lost $0.8 million in the first three months of 2016 while HealthAlliance posted a $3.1 mil- lion first quarter profit. Consolidated efforts Lynn Nicholas, president and CEO of the Massachusetts Hospital Association, said changes in health care have made it increasingly difficult for smaller institu- tions to go at it alone. Merging together and consolidating under a larger umbrella can give smaller hospitals better access to capital, more leverage in recruitment – especially when it comes to specialists – and better alignment of care, Nicholas said. "Health care is becoming so complex that it is a certainly to a smaller organi- zation's advantage to be able to pull resources from and share management talent with another entity," she said. Nationwide trend The possibility of consolidation echoes similar strategies taken by other hospitals and health systems across the country, said Nicholas. Framingham Union Hospital and Leonard Morse Hospital in Natick found success by merging together as MetroWest Medical Center, which is owned by Tenet Healthcare, and North Shore Medical Center, which includes Salem Hospital and Union Hospital, is part of Partners HealthCare System. "Whenever I've talked to hospital CEOs and senior staff members in orga- nizations that have done that, they tell me after the fact it was the best move for the community and staff," Nicholas said. "They're able to focus more on local needs and the unique needs of that com- munity, but they have help, if you will, from a larger organization, so it's an asset." Spano said UMass Memorial expects to have more information on the poten- tial merger in October. n In Review CENTRALMASS UMass Memorial exploring Clinton, HealthAlliance merger Carberry to retire as Quinsigamond Community College president Gail E. Carberry, who has led Quinsigamond Community College as its president for 10 years, announced in September she will retire from her posi- tion at the end of the 2016-2017 aca- demic year. "My homecoming back to Worcester a decade ago to lead this wonderful college in the community that nurtured me into adulthood has been a precious personal blessing. It is time to allow a new surge of energetic leadership to ride the next exciting wave of QCC's future," Carberry said in a press release. Carberry joined QCC in 2006, after 30 years at Springfield Technical Community College. She is a graduate of Springfield Tech and received master's and doctoral degrees from the University of Massachusetts Amherst. WPI breaks ground on $49M build- ing; completes $18M in fundraising Worcester Polytechnic Institute has broken ground on its Foisie Innovation Studio and announced alumni had raised $9 million in three months to help bring the project to fruition. The $49-million, 78,000-square-foot facility includes a robotics lab, maker- space and high-tech classrooms that will allow students to dive into STEM educa- tion. The space will allow students to find a commercialization pathway for their projects, according to WPI. The building also includes a three- floor residence hall with space for 140 students. The new building was partially funded by $18 million in fundraising. In the past 18 months, $9 million of that was raised by 1,300 alumni to meet a $3-million challenge grant from the George I. Alden Trust. UMass Memorial is region's most profitable hospital in 2015 All but two of the acute-care hospitals in Central Massachusetts were profitable last year, according to a report by the Massachusetts Center for Health Information and Analysis. Athol Hospital and UMass Memorial -- Clinton Hospital were the only in the region to lose money. This was a strong showing for Central Massachusetts as overall statewide median margin declined from 4.2 percent in fiscal 2014 to 3.7 percent in fiscal 2015. In the region, UMass Memorial Medical Center in Worcester with $60 million (total margin 3.91 percent) had the highest profit. The others were: • Saint Vincent Hospital in Worcester with $44.9 million in profits (total mar- gin 10.4 percent) • Harrington Memorial Hospital in Southbridge with $9.3 million in profits (total margin 7.34 percent) • Milford Regional Medical Center with $7.4 million in profits (total margin 3.72 percent) • HealthAlliance Hospital in Leominster with $7 million in profits (total margin 4.15 percent) • UMass Memorial -- Marlborough Hospital with $4.6 million in profits (total margin 5.67 percent) • Heywood Hospital in Gardner with $4.6 million in profits (total margin 4.34 percent) • MetroWest Medical Center in Framingham with $3.9 million in profits (total margin 6.23 percent) • Nashoba Valley Medical Center in Ayer with $3.2 million in profits (total margin 6.89 percent) • Athol Hospital with $402,216 in losses (total margin -1.74 percent) • UMass Memorial -- Clinton Hospital with $1,229,000 in losses (total margin -4.6 percent). Centro audit finds Puerto Rico trip, golf outing payments A state audit has revealed more than $300,000 in inappropriate payments to Worcester adult foster care provider Centro Las Americas Inc., including money used for golf outings, gifts and a trip to Puerto Rico. The financial investigation of Centro's activities from 2013 through 2015 by State Auditor Suzanne M. Bump found payments for duplicative services that clients received through the Home Health Program from other providers. The duplicate payments are part of a larger, systemic issue within MassHealth, with the audit finding email instructions to the provider that differed from state law. Beyond these duplicate payments, the audit also found that Centro used $57,341 in state funds for unallowable expenses including trips to Puerto Rico for investigating an opportunity to develop a new revenue stream, golf out- ings, meals without proper documenta- tion, and gifts. Bump is calling for a reimbursement for these funds and the creation of policies to ensure proper spending in the future. Sunovion plans $624M Canadian acquisition Marlborough drugmaker Sunovion Pharmaceuticals has agreed to acquire Toronto-based Cynapsus Therapeutics for $624 million in the fourth quarter. The deal centers on Cynapsus pro- posed drug to treat Parkinson's disease, specifically the so-called off episodes where the brain's dopamine levels fall below critical levels to maintain motor function. Sunovion plans to fund the deal with its cash on hand, according to the com- pany. REGIONAL BRIEFS >> Continued on next page HealthAlliance Hospital's profits would help off- set the losses at Clinton Hospital, while the two could strengthen their level of care. Verbatim "We love to celebrate new business in Worcester, but sup- porting our mainstay local businesses is just as important." City Manager Edward Augustus, on family- owned Worcester company Barrows Hardware expanding its location by 6,300 square feet >> "I do think that if [the drug] industry does not change its habits, you will see legislation both at the state level and the federal level." Health Policy Commission Chairman Stuart Altman, about the drug industry needing to rein in the costs of its products >> "It is vitally important for me to give back to Nichols and to help students who, like me, hail from Western Massachusetts." Stephen Davis, president of Springfield- based Ventry Industries, of his $1 million gift to Nichols College in Dudley to create a scholarship fund for students from the west- ern part of the state >> BY LAURA FINALDI Worcester Business Journal Staff Writer

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