Worcester Business Journal

F OC U S C E N T R A L M A S S . 1 0 0 How a merger saved Athol Hospital and made Heywood stronger Reaching higher ground BY EMILY MICUCCI Worcester Business Journal Staff Writer O n April 26, hospital exec- utives and business lead- ers from the North Quabbin region gathered on the grounds of Athol Hospital to celebrate the start of con- struction of a new emergency depart- ment and medical arts building. The project will double capacity in the emergency room, called the Center for Emergency Care at Athol, add a new radiology department and office space for primary, specialty and behavioral health providers. It's a long-awaited mile- stone for Athol Hospital, a 25-bed facility in dire need of renovation and greater capacity for years, and it probably wouldn't have happened had it not merged with Heywood Hospital in Gardner to create the Heywood Healthcare system just over four years ago. At the time of the merg- er, Athol, then known as Athol Memorial Hospital, had four days of cash on hand and one inpatient bed filled, said Winfield Brown, president and CEO of Heywood Healthcare. Since then, Athol has swung to profitability, with an operating margin holding at about 3 percent and volume has increased every year, with an average daily census of 13. This follows key steps to increase services on campus, such as adding car- diology services five days a week, and adding swing beds which allow Athol to provide rehabilitation services on site for patients ready to be discharged. "Athol's just had a beautiful renais- sance," Brown said. "That has given our board the confidence to take the next step." Just as Athol is getting needed capital investment and is poised for growth, the larger Heywood Healthcare system has also gained an edge after the alli- ance was made official on Jan. 1, 2013. Heywood has grown its behavioral healthcare business, opening the first phase of the Quabbin Retreat in Petersham, with phases two and three, including substance abuse detox and residential treatment programs, slated to open in the next few years. Meanwhile, Heywood is planning the renovation of its operating rooms, cre- ating the Heywood Surgical Pavilion, a project that's about two years out. In May, Heywood Hospital added 350 parking spaces covered by a solar array. Fulfilling a promise The capital projects are being paid for in part by the system's $10-million capi- tal campaign, called "Fulfilling Our Promise." Brown said the title is an ode to Heywood Hospital's good-faith prom- ise to Athol Memorial, that if it joined forces with Heywood, the system would build a new emergency room in Athol within the first five years of the alliance. Athol Hospital, formerly Athol Memorial Hospital, is still licensed separately from its larger sister, 138-bed Heywood Hospital, but the two organizations streamlined administrative functions after the merge. Brown, formerly vice president of administration at Lowell General Hospital, stepped in as Heywood Hospital's chief executive in June 2011, with a few months left in the hospital's fiscal year. Heywood finished with a $3.5 million operating loss that year, which Brown said was significant for an organization of its size. But Heywood has been profitable every year since, finishing in the black when other area hospitals lost money. Like Athol, Heywood Hospital's mar- gins hover around 3 percent, "and that's a challenge to hang on to," Brown said. "Financially, we are solid, but there's limited resources like every other orga- nization," Brown said. Staying independent Athol Hospital and Heywood Hospital are disproportionate share hospitals, meaning a large percentage of their patients are covered by Medicaid and Medicare insurance plans. Those contracts provide lower reimburse- ments than typical commercial insur- ance plans: 73 percent of Athol patients are covered by government contracts, as are 64 percent of Heywood patients. The population of the North Quabbin CM100 2017 rank: 39 2016 rank: 38 2017 employees: 968 2016 employees: 998 2017 revenue: $100.7M 2016 revenue: $100- $110M Heywood Healthcare President and CEO Winfield Brown stands outside the Watkins Center for Emergency & Acute Care at the Heywood Hospital campus in Gardner with Tina Santos, chief nursing officer and vice president of operations for the system. 12 Worcester Business Journal | May 29, 2017 | wbjournal.com P H O T O / E D D C O T E

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