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CDH, Mass General reach terms, antitrust reviews next

  • Cooley Dickinson Hospital in Northampton <br/>GAZETTE FILE PHOTO
  • Cooley Dickinson Hospital in Northampton.<br/><br/><br/>GAZETTE FILE PHOTO

NORTHAMPTON — Cooley Dickinson Hospital has hammered out an affiliation agreement with Massachusetts General Hospital and must now gain state and federal regulatory approvals before it can join the larger health care system in Boston later this year.

Hospital officials said they plan to file paperwork this month with the state Department of Public Health and seek antitrust review from either the Federal Trade Commission or U.S. Department of Justice. The state attorney general’s office also likely will review the agreement.

After the reviews, the two hospitals will continue to work out details on how the institutions will collaborate in certain clinical areas and on cost savings, according to Dianne Cutillo, a hospital spokeswoman.

The development comes three months after Cooley Dickinson Health Care Corp.’s board of trustees voted unanimously to approve the pact, which the boards of Mass General and its parent company, Partners HealthCare System, had agreed to in October.

Mass General will have oversight and control over Cooley Dickinson Hospital and its board once the regulatory process is complete, though Cooley Dickinson officials said the agreement’s terms allow for “robust local governance.”

The Cooley Dickinson board will remain responsible for the financial management of the hospital’s operations, though Mass General’s board will have the final say over budgets. Cooley Dickinson trustees will continue to credential members of the medical staff and oversee quality compliance, though Mass General and Partners HealthCare will approve all major capital projects and any debt financing for CDH. In addition, Mass General will appoint all members of the CDH board of trustees, though a CDH nominating committee will recommend candidates for most of the positions. No staffing changes or cuts have been identified under the new arrangements and the hospital’s name will not change, according to CDH officials.

Retaining local governance and local access to health care were vital to any joint agreement, hospital officials have said. CDH also will continue to oversee all its fundraising programs and use any locally raised funds to serve residents here, according to the terms.

“From the board’s perspective, it’s an exciting time,” said Matthew Pitoniak, chairman of the CDHCC board of trustees. “We’re looking forward to being partners with a great institution.”

The alliance has been years in the making for the 125-year-old Northampton hospital and is driven by its need to enhance its programs and revenue, reduce its overhead costs and survive in the miasmic and rapidly changing health care marketplace.

Cooley Dickinson joins a burgeoning group of community hospitals seeking to partner with other health care systems across the country, a movement driven by the prospects of health care reforms and setting up what is known in the industry as Accountable Care Organizations or ACOs, said Lynn Nicholas, president and chief executive officer of the Massachusetts Hospital Association.

“It’s a national trend, but in Massachusetts, it’s happening at a very, very fast pace,” Nicholas said.

She noted that while many hospitals are teaming up with larger organizations, these affiliations don’t preclude relationships with other health care systems. Cooley Dickinson Hospital officials have said they will continue to refer patients with various needs to Baystate Medical Center in Springfield, for example.

“There are myriad types of relationships, and all of these relationships will not be black and white in a little box tied up with a bow,” Nicholas said.

Nicholas said that what’s interesting about the affiliation between CDH and Mass General is that the two institutions are across the state from each other and not as close geographically, which has generally been the case for similar partnerships thus far.

She described CDH as a “very sophisticated, highly regarded hospital” whose culture and focus on providing quality care to patients was likely a good fit for Mass General. She also praised the hospital for being proactive in seeking out a new relationship with larger hospital and preventing the kind of financial distress some other similar-sized hospitals are enduring in the commonwealth.

“Many executives from the smaller institutions say, ‘I don’t think we would have survived in the long run if I didn’t do this,’ ” she said.

Pitoniak said the Cooley Dickinson board’s responsibilities are expected to change little other than that most things, including budgets, will need to be checked through Mass General, an arrangement not unlike its previous affiliation in the Dartmouth-Hitchcock Alliance, which ended in 2008.

He said the affiliation talks between Cooley Dickinson and Mass General representatives were “truly negotiations.”

“They have listened when we have spoken and that’s something to note, and I think that will be indicative of things going forward,” Pitoniak said.

In addition to governance, the new agreement addresses clinical services, finances and future preparations for managing health care services in new ways.

The hospitals are already engaged in telemedicine services, particularly in the area of neurology. CDH, among other community hospitals, does not have enough neurologists to immediately evaluate all patients who come to its emergency department and who may be suffering from a stroke, for example. The hospital is now using neurologists on duty at Mass General who can see patients over a video monitor, view test results and support emergency room physicians with courses of treatment.

Cancer program leaders at both hospitals also are working collaboratively on the design of Cooley Dickinson’s planned cancer center, said Cutillo, the CDH spokeswoman. The two hospitals have a history of working together on cancer treatment and the affiliation is expected to provide easier access to the expertise and services of the Massachusetts General Hospital Cancer Center.

On the business end, both hospitals expect to save money by combining purchases of supplies and materials, vendor contracts, information technology and insurance policies, including malpractice insurance. The goals of these savings are to make care more affordable for area residents, according to hospital officials.

This year, Cooley Dickinson dropped prices for many outpatient procedures to lower co-pays and deductibles for area residents. Officials say the hospital plans to continue lowering prices and negotiate with health insurers so that more patients using CDH will pay less in out-of-pocket expenses.

The terms also include provisions for the hospitals and the Cooley Dickinson Physician Hospital Organization to work together and build an integrated physician-hospital network designed to transition from a fee-for-service system of payment to a payment system known in the industry as “population health.”

The latter system is a product of the federal Affordable Care Act and essentially pays doctors and hospitals to keep patients healthy under an Accountable Care Organization or ACO. The new, cost-conscious approach seeks to provide a more coordinated range of care for patients, focusing on prevention of sickness, avoiding expensive treatments and increasing insurance access for the uninsured, which Massachusetts lawmakers and the governor have earlier supported through legislative reforms.

Dan Crowley can be reached at dcrowley@gazettenet.com.

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