Worcester Business Journal

10 Worcester Business Journal | December 5, 2016 | wbjournal.com ers. CMIPA doctors would not be employed by Steward, but would be part of Steward Health Care Network, the second largest physician network in the state. The Health Policy Commission is conducting a preliminary review of the agreement, to gauge whether it will impact the cost, access and quality of health care. Tip of the iceberg "It's their way of growing their net- work," said Lynn Nicholas, president and CEO of the Massachusetts Health and Hospital Association. While Steward isn't a member, Nicholas said it and other pro- viders are widening their nets in order to grow because of cost pressures the healthcare industry is facing. "You're only seeing the tip of the ice- berg," Nicholas said, of looming changes in the provider landscape. Steward's own growth may also just be gaining traction. The company, backed by private equity firm Cerberus Capital Management, announced in September it received $1.25 billion from an Alabama-based real estatement investment trust to fund a national expansion plan, which may include new hospital acquisitions. This followed Steward's first-ever operating profit in July, at $131 million. "This ensures Steward will continue to provide high quality health care at an affordable cost in New England, and enables us to grow our proven quality model nationally," Steward President and CEO Ralph de la Torre said in a statement announcing the funding. The CMIPA predicament CMIPA officials have spoken in recent years of their need to invest in new infrastructure in order to keep members afloat. Specifically, the cost of electronic health records (EHR) systems has been problematic for the roughly 200-member organization, which provides insurance contracting, case management and other support services for its doctors. Such EHR systems carry price tags better suited to larger organizations. The CMIPA also doesn't have enough members to participate in viable risk-based contracts, in which insurers give providers financial incentives for managing patients' health well, and on budget. The healthcare system, both in Massachusetts and nationally, is transitioning to this accountable care organization (ACO) model, but providers need large numbers of patients in order to ink such contracts. Steward may have seemed like a prime partner for the CMIPA, because Western expansion S ince buying the troubled Caritas Christi Health Care sys- tem in 2010, Boston-based Steward Health Care has sys- tematically shored up the multi-hospital system, growing from six to 10 hospitals through acquisitions. Until now, the growth has been large- ly concentrated in Eastern Massachusetts, but Steward's latest ven- ture – the planned acquisition of the Central Massachusetts Independent Physicians Association (CMIPA) – would bring a major new healthcare player into a region that Boston-area providers have mostly stayed out of. According to a notice filed with the Massachusetts Health Policy Commission, Steward has agreed to acquire CMIPA's assets in a deal that would bring CMIPA under the Steward umbrella for the purposes of forming an accountable care organization that brings patients treated by CMIPA doc- tors under Steward's contracts with pay- Armed with $1.25B and plans to acquire hospitals, Steward Health Care of Boston is making inroads into Central Massachusetts BY EMILY MICUCCI Worcester Business Journal Staff Writer Bring on the Boston competition Steward Health Care has joined the growing trend of Boston companies extending into the Central Massachusetts market, by partnering with a physician practice in the region. Despite the threats to their market share, WBJ readers – when polled – overwhelmingly welcomed the competition to the area. F L A S H P O L L How do you feel about Boston companies expanding into Central Massachusetts? Companies in Central Mass. have been isolated for far too long and could use the competition. 15% This is why it is even more important for us to support local companies. COMMENTS: Bring. It. On. 72% "Of course they should! We have roadways, workers, lower cost-of-living and real estate, and we're still really close to Boston. In fact, more should locate HQ here and be part of the renaissance like the old days of Kendall Square and the waterfront!" Lynn Nicholas, president & CEO, Massachusetts Health & Hospital Association Sizing up Steward For-profit Steward Health Care, founded in 2010, has strengthened its position after turning its first- ever operating profit in 2015. Here are some key measures to show how the Boston-based Steward system stacks up. Source: Steward Health Care 9% 4% I don't want to see the business community here lose its local flavor. $131 million operating profit (2015) $2.2 billion in revenue (2015) 2nd largest healthcare provider in Massachusetts, behind Partners HealthCare 17,000 employees 3,000 physicians 30 urgent care centers 10 hopitals million spent on infrastructure and services since founding $800 A nurse at Nashoba Valley Medical Center works with a patient. P H O T O / F A C E B O O K / N A S H O B A V A L L E Y M E D I C A L C E N T E R

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