Hallmark Health's CEO sees competitive landscape changing


Despite turning in before 11 p.m. most nights, the salt-and-pepper-haired, blue-eyed executive wakes up around 3 a.m., thinking about finances, competition, manpower - you name it and it's on his mind. But rather than toss and turn, he writes his thoughts down on a pink note pad within reach on a bedside table. And they are not quickly forgotten.

"Usually the next morning I will deal with it and I follow it up pretty quickly," Sack said.

As CEO of one of the state's dwindling number of independent community hospital groups, Sack has kept Hallmark Health independent in the face of ever-increasing competition from Boston's teaching hospitals, which have methodically expanded their reach into the suburbs.


Hallmark Health is a 10-year-old network made up of Lawrence Memorial Hospital, Melrose-Wakefield Hospital and various satellite operations in Reading, Stoneham and Malden. Based about 11 miles from Boston, Sack has nurtured a strategy of working with Boston's teaching hospitals and finding ways to collaborate in mutually beneficial ways. He has continued long-standing clinical collaborations with Massachusetts General Hospital, for example, and launched a newborn nursery affiliation with Tufts Medical Center. He's also trying to expand services for Hallmark's target population: aging baby boomers who live in the towns it serves.
The hospital opened a $4 million cancer center in Stoneham in 2007, and last year launched an expanded, $4.6 million outpatient facility in Reading in a prominent location near the colossal Jordan's Furniture along Route 128.


But the slowing economy and intensifying competition are starting to hurt.


Hallmark posted an $8.3 million surplus in fiscal 2007. During the last fiscal year it also generated more than $284 million in net patient service revenue. In 2006, Hallmark reported a net surplus of $14.6 million. Final numbers aren't out for the current fiscal year, but Sack said the hospital should just break even, as the slowing economy has stunted projected patient volume.
And a short drive up Route 128, increased competition is on the way. Lahey Clinic is expanding its ambulatory care facility in Peabody and MGH parent Partners Healthcare are building a mammoth outpatient facility of its own in Danvers. Also nearby is a newly opened facility built by Beverly Hospital and Northeast Health System.


Sack, an active board member of the Massachusetts Council of Community Hospitals, said he prefers to find common ground with Boston's teaching hospitals. But he is alarmed at their decision to compete directly with community hospitals on their home turf.


Still, Sack finds kind words for his competitors, such as MGH CEO Dr. Peter Slavin, who paid Sack a visit when he first began the Hallmark job.


Slavin downplays Sack's concerns over the new competition, stating that he expects to see patients hailing from Danvers and points further north, rather than from Sack's territory.
Slavin said he and Sack have often talked about competition, and other issues, and respects him a great deal.


"He is a very effective, straightforward, clear, reasonable and deliberate person to work with," Slavin said.


Still, Sack is both weary and realistic about oncoming competition.


"I am expecting to have some significant impact when the (MGH/partners) facility opens ... and I don't view that as healthy," he said. "But my interest is in working with them in other areas to see if we can create more synergy in those relationships."


Sack, a married father of three adult sons, has more than 30 years of experience in the health care industry. He helped turn around Affinity Health Alliance and Union Hospital in Maryland, and has served as a hospital executive in Massachusetts and Connecticut.


Ever practical, Sack makes the most of his sleepless nights, using those quiet moments to jot down ideas about quality, cost control, finances and staffing on his pink sheets of paper. Those missives are often followed up by meetings with his staff.


And while he admits impatience because there is "so much to do and so little time to do it in," Sack focuses on collaboration with his executives in trying to find new ways to compete and grow.


"You have got to ask people and engage them in discussions and decision-making," he said.
Sack comes into Boston regularly for meetings or to lobby legislators at the Statehouse. He devours industry journals and looks for articles or ideas that would be helpful to Hallmark.
But he's also not all about work. Sack reads suspense novels. He kayaks and rides a bike, and attends the occasional Boston Red Sox game. At 6 feet tall and 200 pounds, he also tries to take care of himself physically in order to "practice what we talk about in terms of health."
Sack is convinced this is a time for Hallmark and its peers to evolve into something new. The end result, however, is still an open question.


"One of the changes we are going to have to adopt is to look at how we provide an appropriate level of service to the community. We need to, if necessary, reinvent ourselves.
"This is a puzzle ... a puzzle that is worthwhile."

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