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Boston Globe
September 24, 2006
Boston's big teaching hospitals are strengthening their presence in
outlying communities, and local medical centers are nervous. Can they
compete for patients against such prestigious heavyweights?
By Christopher Rowland, Globe Staff
Academic medical centers in Boston are putting a tighter competitive squeeze on
community hospitals by exporting more of their prestigious medical services to the
suburbs.
The plan disclosed this month by Tufts-New England Medical Center and New England
Baptist Hospital to build a new hospital with up to 190 beds somewhere along Route 128
-- perhaps in Westwood -- is only the most prominent example of a trend that is rattling
many executives at community hospitals.
Harvard-affiliated heavyweights Massachusetts General Hospital and Beth Israel
Deaconess Medical Center, for example, are also increasing their strength in outlying
communities. With their strong brand names and reputations for excellence, many
expect they will easily lure suburban patients from local hospitals.
“Why do you rob banks? Because that's where the money is. Why do you go to the
community? Because that's where the patients are," said Michael V. Sack, chief
executive of Hallmark Health System Inc., which operates Lawrence Memorial Hospital
in Medford and Melrose-Wakefield Hospital in Melrose.
“It puts community hospitals in a very vulnerable position," he said.
The competition from academic medical centers adds to pressure already being applied
by community doctors and large physician groups that are offering their own medical
services for profitable procedures such as radiology, radiation oncology, outpatient
surgeries, endoscopies, and cardiac diagnostics.
And while community hospitals are performing fewer lucrative procedures, they are left
to cope with the same overhead costs and an obligation to treat anyone who walks
through the door, regardless of their ability to pay, hospital executives said.
News of the Tufts-New England Medical Center and New England Baptist Hospital plans
was published in the Globe on the same morning community hospital executives
gathered for a regular meeting of the Massachusetts Council of Community Hospitals.
The meeting buzzed with worries about added competition, participants said.
Several executives who attended said later that they are increasingly concerned about
fundamental trends in the state's healthcare industry.
Massachusetts already has the costliest healthcare in the nation, according to national
data. Bringing expensive teaching medicine to the suburbs will exacerbate the problem,
community hospital executives said.
“That potentially edges out high-value, efficient care in favor of yet more terrific but really
expensive care that carries the burden of the costs of teaching," said Delia O'Connor,
chief executive of Anna Jaques Hospital in Newburyport. “I'm not sure we can afford this
as a state."
In fact, many community hospital leaders say their facilities are able to provide some
medical services at lower costs than Boston-based hospitals, and at a higher level of
quality.
Still, despite double-digit increases in annual insurance premium costs, employers and
political leaders have yet to demand major changes in how healthcare is delivered.
Because Massachusetts has so many top-level teaching institutions, residents have
become accustomed to seeking even routine care at expensive hospitals simply
because they can.
About half of all hospital admissions in Massachusetts are at academic medical centers - about 2 1/2 times higher than the national average, according to national and state
statistics. The disparity shows no sign of easing. Massachusetts General is building an outpatient
center in Danvers, and already operates one in Waltham within sight of traffic streaming
by on Route 128. Beth Israel is planning to expand services at its Beth Israel Deaconess
Hospital-Needham Campus. And Children's Hospital Boston is moving more services to
Waltham and other satellite locations.
This is not all bad news for local hospitals. Each of the downtown hospitals also is
seeking stronger affiliations with community hospitals, which community hospital
executives said may mitigate the impact of their presence. Affiliations produce referrals
to downtown medical centers while allowing community hospitals to enhance their
reputations with recognizable brands.
“If you can't beat 'em, join 'em," said Christine C. Schuster, chief executive of Emerson
Hospital in Concord, which has clinical partnerships with Mass. General, Tufts-New
England Medical Center, and Lahey Clinic.
“We really have to balance the collaboration and the competition."
Ellen Zane, chief executive of Tufts-New England Medical Center, has sought to
reassure community leaders that she does not want to compete with community
hospitals to provide basic care. She said her goal is to offer the most advanced
procedures into the suburbs, eliminating the need for many patients to travel into the
city.
Zane and New England Baptist chief executive Joseph Dionisio sent a letter to regional
hospital chiefs this month in which they outlined their rationale.
“Studies show that more than 160,000 patients in Eastern Massachusetts drive into
Boston to receive care at an academic medical center," they wrote. “We believe some of
these individuals would benefit if they could access care for critical and complex medical
conditions in a more convenient location."
The theme of the letter was cooperation. “We seek to complement the excellent services
community hospitals like yours provide by offering advanced medical services closer to
and more convenient for patients," it said.
John Erwin, executive director of the Conference of Boston Teaching Hospitals, said
academic medical centers are responding to demand from Massachusetts residents for
more convenient care.
“It's going to where the people are and bringing the best of academic medicine out to the
community," Erwin said. “The teaching hospitals are just responding to the market."
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