NORTHAMPTON, Mass. – The Cooley Dickinson Board of Trustees voted this evening (Monday, Feb. 27) to negotiate an affiliation agreement with Massachusetts General Hospital, one of two strong finalists in the hospital's search for the affiliation partner who will best help Cooley Dickinson ensure a strong health system for the community.
Both Mass General and finalist Baystate Medical Center of Springfield offered Cooley Dickinson the ability to achieve the goals the Trustees set for joining a larger system: to develop and expand care programs and increase revenue, reduce overhead costs, and help Cooley Dickinson thrive in the new era of population-based care delivery and payment.
However, the Trustees gave the edge to the Boston hospital because, "As one of the pre-eminent hospitals in the country, Massachusetts General has the financial resources and intellectual know-how to help Cooley Dickinson thrive as we navigate the fundamental restructuring of health care that is under way," said Trustee Chair Matt Pitoniak.
Unanimous Support of Decision
A majority of the board voted to enter into exclusive negotiations with Mass General. The board then unanimously voted to support moving forward with that decision.
"We are truly humbled that the leadership of Cooley Dickinson Hospital has placed its trust in Mass General to help preserve and enhance the outstanding care that patients and families in western Massachusetts have counted on for so long," said Peter L. Slavin, MD, president of MGH. "We look forward to working with the Cooley Dickinson board, management, physicians, and staff on the next phase of this process."
Cooley Dickinson CEO Craig Melin said the deal with Mass General will grow programs and volume by bringing additional specialists to Northampton and by increasing the use of telemedicine. Some of the ways MGH will help Cooley Dickinson reduce overhead costs include providing access to low-interest refinancing of $62 million in bonds, lower malpractice insurance cost, and group purchasing rates for big-ticket purchases, such as information technology systems.
Infrastructure Support to Manage Population-Based Care
Mass General will share its care pathways and provide the information systems infrastructure needed for Cooley Dickinson to manage the shift from a payment system that provides a fee for every service to payment for managing the health of a population. Population-based care is paid for through accountable care organizations that share management of the cost and quality of care.
Medical Staff President Margaret Russo, Pitoniak, and Melin co-led the Affiliation Task Force that conducted the search for a partner. The Affiliation Task Force, charged by the Board of Trustees, included a total of 14 physicians, six trustees, and six administrators.
Russo said, "Physicians at Cooley Dickinson and Mass General gained experience co-managing care through our collaboration with the Cancer Care program at MGH and we look forward to expanding that work together to strengthen care in our community."
David F. Torchiana, MD, chairman and CEO of the Massachusetts General Physicians Organization, called the pending relationship with Cooley Dickinson good news for both institutions.
"Strengthening the relationship would enable caregivers at the two hospitals to communicate and collaborate more effectively, particularly around patients who may require highly specialized services," Torchiana said. "As we all do our best to prepare for the uncertainties that lie ahead for health care, the systems of care we establish will be increasingly important."
Baystate Medical Center proposed to create a regional care delivery system with Cooley Dickinson as a member; it already owns hospitals to the north and east of Cooley Dickinson. That model was attractive because similar regional care delivery systems, such as Geisinger Health in Pennsylvania, do well with managing the health of its population. Nevertheless, some Affiliation Task Force members and Trustees were concerned about reducing competition in the Pioneer Valley if Cooley Dickinson joined Baystate.
Local Board of Trustees Maintained
Mass General was also chosen because of how its proposal met the culture and local-role-in-governance criteria that the Task Force and Board adopted for selecting a partner.
"Mass General is a good fit for the Cooley Dickinson Medical Staff because its culture is a physician-led organization with a long history of physicians having a strong voice in how clinical decisions are made," Russo said.
Pitoniak explained that as a member of the Mass General system, Cooley Dickinson will maintain a local Board of Trustees. The local board will be charged with credentialing physicians, as it does now, and monitoring CDH's compliance with the quality and financial performance metrics set by Mass General.
Cooley Dickinson has been an independent and locally governed organization for all but 15 of its 125 years. Cooley Dickinson leaders considered maintaining independence during the first year the hospital was on its own after the Dartmouth-Hitchcock Alliance disbanded in 2008.
Next Steps: Negotiate Merger Agreement
The selection process resulted in an outline of how Cooley Dickinson will join Mass General. Over the next few months, those terms will be converted to an affiliation agreement and physicians in both organizations will design how care will be delivered locally, clinical area by clinical area. During the time until the agreement is approved, both organizations will also conduct due diligence. We expect the Attorney General to look carefully at the merger in light of concerns about prices at both Mass General and Cooley Dickinson.
The Board of Trustees will make a final decision on merging with Mass General at the end of the negotiation and due diligence period.
Reasons to Seek Partner
However, a confluence of factors led Trustees to charge the Affiliation Task Force in 2010 to seek a partner, Pitoniak said.
Melin explained that the restructuring of the healthcare system away from fee-for-service has already begun and will proceed more quickly in Massachusetts than in the rest of the country. Further:
- Governments seek to reduce the cost of health care through decreasing Medicare and Medicaid payments. Health insurers respond to businesses' inability to keep paying high health insurance premiums by also reducing payments to provider.
- Preventing further payment erosion in a pay-for-performance climate requires health care providers to continually increase the quality of care.
- ACOs require scale — quality, cost, and infrastructure (such as IT systems) — for population-based medicine.
All of this will mean growing operational stress for hospitals and physicians. Organizations that thrive in this world will be those where there is clinical and economic integration among hospitals and physicians for delivery of acute care, chronic care, and population-based care. Without a partner, Trustees envisioned that the operational stresses could weaken Cooley Dickinson in the future and, for example, force the hospital to close programs and services, diminishing access to health care for area residents. The Trustees chose to seek a partner while CDH is still strong from both a quality of care and financial point-of-view.
The process of selecting a partner was thorough, thoughtful, and inclusive, with more medical staff representation on the selection committee than most hospitals include, Pitoniak said. In addition, input was sought through Town Hall meetings and forums with employees, physicians, volunteers and community groups and the process leaders communicated frequently through Affiliation Update newsletters.
About Massachusetts General Hospital
Founded in 1811, Massachusetts General Hospital is the original and largest teaching hospital of Harvard Medical School. The 950-bed academic medical center each year admits approximately 47,000 patients; records 1.5 million outpatient visits, including 90,000 Emergency Department visits; performs 38,000 surgical procedures; and delivers 3,600 babies. The MGH conducts the largest hospital-based research program in the United States, with an annual research budget of more than $750 million and major research centers in AIDS, cardiovascular research, cancer, computational and integrative biology, cutaneous biology, human genetics, medical imaging, neurodegenerative disorders, regenerative medicine, reproductive biology, systems biology, transplantation. Mass General, along with Brigham and Women's Hospital, is a founding member of Partners HealthCare, an integrated health care delivery system that includes the two founding academic medical centers, community hospitals, primary care and specialty physicians, specialty facilities, community health centers and other health-related entities. Learn more at www.massgeneral.org/
About Cooley Dickinson Hospital
Cooley Dickinson, a full-service community hospital, is ranked in the top 5 percent of all U.S. hospitals in patient safety by HealthGrades®, the country's leading independent health care ratings organization. It is the only hospital in the Springfield area to achieve the HealthGrades Patient Safety Excellence Award™ for three consecutive years. Cooley Dickinson's staff of 1,650 professionals and more than 300 affiliated physicians comprise a network of emergency, surgical, clinical, rehabilitative, hospice and home care expertise that treats 40,000 emergency patients per year, delivers 800 babies, and collaborates with Massachusetts General Hospital to deliver comprehensive cancer care. Cooley Dickinson's vision is to be the nation's premier not-for-profit community hospital, able to provide local access to the most advanced clinical treatments in a caring and neighborly setting. Learn more at www.cooley-dickinson.org.
For more information, contact
Christina Trinchero, CDH Marketing Communications, (413) 582-2421, firstname.lastname@example.org Peggy Slasman, Massachusetts General Hospital, (617) 724-2750, email@example.com