Worcester Business Journal

wbjournal.com | November 21, 2016 | Worcester Business Journal 13 H E A L T H C A R E F O C U S Such contracts, which encourage pro- viders to take care of patients on a bud- get, work better as systems grow, Nicholas said. State lines are becoming increasingly permeable, with consumers going back and forth from Massachusetts to Connecticut, New Hampshire and Rhode Island. "This is a wise move and also increas- ingly common," Nicholas said, though she noted she's not aware of other sys- tems weighing out-of-state expansions. While Nicholas agreed that Harrington facilities would not require the same vetting as a hospital facility in Connecticut, she said the Massachusetts Health Policy Commission may want to review any expansion plans once they're formalized to ensure they don't create the potential for increasing the cost of health care in Massachusetts. Nicholas believes it would have the opposite effect, since a stronger finan- cial position may ultimately lower the cost of care for patients. Expanding services in the market Northeastern Connecticut has long been on the outer reaches of Harrington's service area, but Harrington does not have any locations in Connecticut. Like many providers, Moore said Harrington wants new patients because of cost pressures. Harrington itself has been able to remain financially solvent and has even thrived in the years since Moore's arriv- al, rolling out new services and loca- tions to become a health are system rather than just a hospital. In November, Harrington opened a new urgent care location in Oxford. That facility is meant to capture new patients on the edge of Harrington's Massachusetts service area and act as an entry point for Connecticut residents who live minutes away from Oxford. In the coming months, a new inpa- tient behavioral health unit will open on the Webster campus, and the Remillard Family Emergency Center was unveiled in January 2015, also in Webster. The investments are symbols of the progress Harrington has made since it took over the campus, formerly Hubbard Regional Hospital, in 2009. Most profitable community hospital Harrington Memorial Hospital, the system's flagship in Southbridge, is the most profitable community hospital in Central Mass., with a $9.3 million profit 2007 Edward Moore joines Harrington as president and CEO; soon after, the organization is renamed Harrington HealthCare System to reflect the scope of services outside the hos- pital. May 2009 Harrington assumes operation of the former Hubbard Regional Hospital in Webster, creating Harrington HealthCare at Webster, an outpatient facility with 24-hour emergency services. June 2009 The Cancer Center at Harrington opens on Harrington's main cam- pus in Southbridge. February 2010 Harrington at Charlton, a 22,000-square-foot outpatient facil- ity, opens at 10 North Main St. in Charlton. March 2013 Harrington at Spencer, a physician office and lab center, opens at 118 West Main St. in Spencer. September 2015 Harrington's first urgent care cen- ter, UrgentCare Express at Harrington, opens in Harrington HealthCare at Charlton building. November 2016 A second UrgentCare Express location opens at 78 Sutton Ave. in Oxford. January 2017 Harrington Recovery Services at Webster, a 16-patient inpatient behavioral health facility, is slated to open on the Webster campus. Recent milestones Harrington Memorial Hospital opened in Southbridge in 1931 after a $150,000-seed pledge from benefactors Charles and Gertrude Harrington. In the last decade, Harrington has transformed from a small community hospital to a regional healthcare system that's made a name for itself because of its ability to grow despite historic changes in the healthcare system that have stymied other players. Source: Harrington HealthCare System Harrington vs. Day Kimball Harrington HealthCare System is making a play for patient volume in Northeastern Connecticut, a territory primarily served by Day Kimball Healthcare. Here's how the two systems compare on a number of important measures. Harrington Day Kimball Healthcare System Healthcare Source: Day Kimball Healthcare 2015 Annual Report, Harrington HealthCare System in fiscal 2015, according to state data. Moore said the entire Harrington system, which includes a physician group, actually had an operating loss of about $2 million but Harrington has maintained its position thanks to a strong balance sheet. Revenue for the whole system has increased from $55 million in 2007 to a projected $170 million in fiscal 2017, Moore said. Harrington has maintained its status as an independent community hospi- tal. But with a realistic outlook, Moore said if Harrington is ever forced to affiliate with another hospital system, as many smaller players have, he wants Harrington to be seen as an asset. "My whole philosophy here is, let's be stronger and then if we need to partner or affiliate with somebody, we do it on our terms," Moore said. Day Kimball vulnerable Day Kimball Healthcare, on the other hand, has treaded water as state budget cuts have caused large reduc- tions in Medicaid payments to Connecticut hospitals. Resulting staff and service cuts have been widely reported, though stakeholders success- fully lobbied for some funding to be restored to smaller hospitals. Meanwhile, the Connecticut Hospital Association (CHA) has taken the state to court and petitioned the Centers for Medicare and Medicaid Services over a ballooning hospital tax implemented during a 2011 budget crisis the CHA says has resulted in nearly 1,400 job cuts statewide. Despite these challenges, Day Kimball Healthcare President and CEO Robert Smanik said he's optimis- tic. Though final year-end results are pending, Smanik believed the system, which experienced a $6-million oper- ating loss last year, is turning around. Medicaid cuts are not unique to Connecticut providers, and Smanik said the cost pressures similar to those Day Kimball and others in his state have faced are prompting Harrington to prod Connecticut for growth potential. Day Kimball has put out feelers in Harrington's South Worcester County territory, sending a mailer along the border highlighting Day Kimball Hospital's new emergency room. "Looking to expand one's reach is something that, I suspect, is on every organization's agenda in a sense – including ours," Smanik said. Competitors or partners? As for Harrington, Smanik said competition is healthy, saying portions of Day Kimball's region are under- served. He said patients may welcome Harrington if it can provide services that are lacking. "I don't know that it has to be a detraction from Day Kimball in Northeastern Connecticut," Smanik said, noting Day Kimball, founded in 1894, has the advantage of brand loyal- ty in the community. For its part, Day Kimball has plans to add new services and is actively recruiting new physicians. It's not impossible that Day Kimball will join forces with Harrington in the future. Asked whether the system, which last year halted plans to affiliate with Hartford HealthCare due to Medicaid cuts, might seek affiliation with Harrington, Smanik said he wouldn't rule it out. "We've had conversations with them over the years," Smanik said. "We're always open for conversation, but at this point there are no specific plans." Harrington CEO Edward Moore ran over final details with the staff of the UrgentCare Express in Oxford in the week leading up to the healthcare system opening the location in November. Founded 1931 1894 Inpatient beds 114 104 Physicians 190 Approx. 200 2015 revenue $141.9M $129M Profit/loss $3.9M loss $6.3M loss Annual ER visits 42,703 (2015) 22,564 (fiscal 2015) Hospital discharges 5,569 (2015) 4,451 (fiscal 2015) W

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