Health

For hospital systems, operating doctors groups is a balancing act \\ By Livia Gershon W hen Edward J. Kelly joined Milford Regional Medical Center 25 years ago, the hospital wasn't in the business of employing physicians. In those years, doctors in Central Massachusetts mostly worked for themselves, either as sole proprietors or in group practices with a few colleagues. But soon, Kelly found that physicians—particularly young ones—preferred to become employees of a hospital physicians' group. When Milford Regional's compe- titor, MetroWest Regional Medical Center, started its own doctors group, doctors who had previously been admitting patients to Milford went to the competition. HEALING THE BOTTOM LINE 20 HEALTH • Fall 2017 "What we realized is that if we didn't employ physicians, we couldn't get them to come to our area," said Kelly, who is now president and CEO of Milford Regional. Today, physician groups owned by hospitals or their parent companies are a key part of the Central Massachusetts healthcare ecosystem. But, for these owners, balancing the financial demands of the groups with community needs can be tricky. Doctors groups bleeding money? In the 2016 financial year, the finances of all hos- pital-affiliated physician groups in Central Massachusetts were in the red, according to a report from the state Center for Health Information and Analysis. That's partly a result of reporting quirks. For example, when a specialist brings a patient to their affiliated hospital and performs a procedure, much of the cost that insurance pays goes to the hospital, even though the patient wouldn't be there without the doctor. Still, the cost of operating physician groups is sig- nificant for health systems. For example, in fiscal 2016, Milford Regional experienced a $5.3 million loss, driven partly by a $5.4 million shortfall for its doctor group, Tri-County Medical Associates. At Southbridge-based Harrington HealthCare System, a $12.4 million profit for Harrington Hospital wasn't quite enough to balance out a $12.7 million loss by Harrington Physician Services. Heywood Medical Group, MetroWest Physician Services, Saint Vincent Medical Group., and UMass Memorial Medical Group all ended up in the red as well, although their associated hospitals more than made up for their losses. Philip Ciaramicoli Jr., president of Tri-County Medical Associates, said that serving the community and maintaining the organization's financial health in the long term requires frequent investment in new services. For example, since last October, Tri-County has opened three urgent care centers. Dr. Elizabeth Siraco is president of Tri-County Medical Associates, owned by Milford Regional Medical Center. Like most doctors groups, Tri- County operates in the red. P H O T O / M A T T W R I G H T

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