Hospital moves toward sale to Partners/MGH

Change would strengthen hospital, leaders say

By Nelson Sigelman - October 19, 2006

Martha's Vineyard Hospital trustees will vote tomorrow on a memorandum of understanding that describes the general terms under which the Island hospital would become an affiliate of Massachusetts General Hospital (MGH), one of the premier medical and teaching institutions in the world.

If board members approve the memorandum, as is expected by hospital leaders, it will pave the way for a seismic institutional shift on Martha's Vineyard and lead the way to profound changes in the way health care is delivered.

The Island's not-for-profit privately owned hospital, founded in 1921, would be one of a group of hospitals, health clinics, and physicians organizations owned by Partners HealthCare System, a nonprofit organization founded in 1994 by MGH and Brigham and Women's Hospital. Among the institutions of which Partners is the parent are Faulkner Hospital, McLean Hospital, Newton-Wellesley Hospital and Spaulding Rehabilitation Hospital.

That list could also include Nantucket Cottage Hospital, where this week its trustees voted unanimously to accept a similar agreement to the one that the Vineyard hospital's trustees will consider tomorrow.

The island hospitals are the state's only two critical access hospitals, a designation that negatively affects complex federal reimbursement formulas for all hospitals in Massachusetts, Partners hospitals foremost among them. That is the backdrop for Partners's interest in an affiliation that could change that equation to its benefit.

The deal is still subject to further negotiations and approval by the MGH board and the state Department of Public Health.

In a meeting with Times editors Tuesday, hospital chief executive officer Tim Walsh and board vice chairman Tim Sweet of West Tisbury described an arrangement they said would provide the Island hospital with access to state-of-the-art medical resources and provide patients with seamless medical care.

The deal is also expected to provide the hospital with long-term financial stability. Although the hospital posted a record profit at the end of its fiscal year on March 31, the Windemere Nursing and Rehabilitation Center, which began its fiscal year on Jan. 1, sustained larger than expected losses in the first quarter.

In 2004/2005 the Island's only nursing home ended the year with a first-ever gain of $62,755 while hospital net income jumped from $485,354 to $652,231. It was the first time the hospital and the rehab center, which had sustained heavy losses in the past, each posted a profit.

Mr. Walsh, who is credited with helping to lead the hospital out of a financial mess to recent profitability, said that an affiliation with Partners, a $6 billion enterprise, would also provide a financial backstop for the two largest Vineyard health-care providers that does not now exist.

The hospital has been engaged in a capital campaign to raise $42 million for the project. Under the proposed agreement, MGH and Partners would contribute $5 million, enough to bring the hospital fund-raising effort to its goal of $42 million for its planned new medical facility, said Mr. Sweet, chairman of the building committee.

The announcement of the pending deal followed weeks of private discussions. It comes two weeks before the Martha's Vineyard Commission's first public hearing, on Nov. 2, concerning the hospital application to rebuild on its current site.

Convincing Islanders

"It is a little breathtaking in its scope, but it isn't complicated," Mr. Sweet said Tuesday, before he described the outlines of a deal he said it is important that Islanders understand.

"Martha's Vineyard has to be convinced this is a good idea," said Mr. Sweet, who said the hospital would soon plan a public forum so hospital and MGH officials could describe the deal and answer questions. He said that the loss of control would likely be of most concern to Islanders. "It is worthy of lot of thought and a lot of discussion," he said.

Under the agreement, Partners would appoint 20 percent of the hospital board. Partners would also approve the hospital's operating and capital budgets.

Mr. Sweet said Partners fully approves of the plans for a new building. If there is a concern, he said, it is only about how the timing will affect the MVC process.

On the clinical side, Mr. Walsh said the hospital would have the opportunity to step up to a level that it could not hope to achieve on its own for a very long time. In particular, MGH uses an integrated information system that provides up-to-date information on every patient at every step in the clinical process, creating a seamless program for patient care.

The affiliation would also mean better access to MGH specialists, something that has been a problem in the past, Mr. Walsh said.

Both Mr. Walsh and Mr. Sweet said that they are satisfied by everything that they have learned so far about Partners and by the degree of independence allowed its other affiliates.

In a prepared statement, Dr. Peter L. Slavin, president of the Massachusetts General Hospital, said, "Martha's Vineyard Hospital and Nantucket Cottage Hospital are much-cherished health-care resources for their individual communities. Partners has remained strong as a system because it recognizes that hospitals need to be different and distinct and have the kind of autonomy and flexibility necessary to preserve the special relationship with their communities. We look forward to the opportunity to work closely with the island hospitals to build upon our ongoing relationships to enhance care. It clearly is in all of our best interests to make sure that the highest quality health care - from preventive services to tertiary care - continues to be easily accessible and available to patients and families who live on or visit these truly special island communities."

Gain, not a loss

Although the hospital's assets, including the new building, would become part of Partners's asset base, yesterday, Warren Spector of Chilmark, co-chairman of the capital campaign, said the reaction from major donors with whom he has discussed the pending deal has been enthusiastic.

"I believe that once the Island community understands the benefits of being a permanent member of this health-care system and in the Mass General family, they will realize it is very much in our long-term interests," he said. "And frankly that is my only issue, that it be to the long-term benefit of the entire Island community to be part of a system run by one of the best hospitals in the entire world, and that is Massachusetts General."

M.V. Hospital chairman John Ferguson, a seasonal West Tisbury resident and president and chief executive officer of Hackensack University Medical Center in New Jersey, said that when he joined the hospital board, one of the goals the board set was to make the Hospital the best rural hospital in the nation. "And this helps it in that direction, no question about it," he said from his New Jersey office yesterday.

Mr. Ferguson said one benefit would be a much more stable medical staff. "Not only can a physician practice out of Martha's Vineyard Hospital, but now they have this wonderful relationship with a major teaching hospital, so it helps them in their careers and what they want to do."

He said that over the past four years the hospital has achieved profitability, improved worker morale and increased the medical staff. Teaming up with an institution such as MGH, he said, completes the picture.

"I know that some people are going to say, oh my God, we are losing the hospital, but it really is not losing the hospital, it is making it better," Mr. Ferguson said.

Background

According to a press release, MGH is the third oldest general hospital in the United States and the oldest and largest in New England. The 900-bed medical center offers sophisticated diagnostic and therapeutic care in virtually every specialty and subspecialty of medicine and surgery. Each year the MGH admits more than 46,000 inpatients and handles nearly 1.5 million outpatient visits at its main campus and health centers. Its Emergency Department records nearly 80,000 visits annually. The surgical staff performs more than 35,000 operations and the MGH Vincent Obstetrics Service delivers more than 3,500 babies each year. The MGH conducts the largest hospital-based research program in the country, with an annual research budget of approximately $500 million. It is the oldest and largest teaching hospital of Harvard Medical School, where nearly all MGH staff physicians serve on the faculty. The MGH is consistently ranked among the nation's top few hospitals by US News and World Report.

Partners HealthCare is an integrated health-care system that offers patients a continuum of coordinated high-quality care. The system includes the two founding academic medical centers, community hospitals, specialty facilities, community health centers, primary care and specialty physicians, and other health-related entities.