Tufts Medical Center and Vanguard Health Care, owner of St. Vincent Hospital in Worcester and MetroWest Medical Center in Framingham/Natick have announced a new alliance to purchase additional hospitals in Massachusetts. As the Globe story below reports, the MNA/NNU nurses at St. Vincent and Tufts were prepared to strike on the same day in 2011 over staffing concerns at both facilities. Our focus as the relationship goes forward will be to continue to ensure that staffing is safe and that nurses can provide the care their patients deserve.
Tufts Medical, Vanguard Health consider alliance
Look to acquire unaffiliated hospitals, integrate care
Tufts Medical Center is in talks to team up with for-profit Vanguard Health Systems to buy independent hospitals and provide more integrated health care across Massachusetts.
The proposed alliance, while stopping short of a merger, could give Tufts and Vanguard more clout to compete for unaffiliated community hospitals with the fast-growing Steward Health Care System as well as with Partners HealthCare System, the state’s largest medical care provider. It could also help the expanded system negotiate better contracts with insurers.
Tufts and Vanguard have been mostly on the sidelines during the past two years as Steward, Partners, and Beth Israel Deaconess Medical Center added to their franchises. The current talks grew out of existing clinical affiliations between Tufts and Vanguard, both parties said.
Under their envisioned partnership, Tufts, located in Boston’s Chinatown neighborhood, would retain its status as a nonprofit teaching affiliate of Tufts University School of Medicine. Vanguard, based in Nashville, would remain an investor-owned chain of 29 hospitals nationwide, including MetroWest Medical Center in Framingham and Saint Vincent Hospital in Worcester.
But they would form a pair of joint ventures with hybrid legal structures that would enable them to play more prominent roles in the state’s rapidly changing health care industry.
One collaboration, a “management services organization,” would be partly owned by the Tufts physician group, called the New England Quality Care Alliance, which already has a relationship with Vanguard’s MetroWest. The arrangement would expand existing medical services in areas such as chronic care management, and allow Tufts and Vanguard to jointly share the risk of managing new global payment contracts with health insurers. Such contracts give doctors and hospitals fixed budgets to care for patients and reward them for providing quality care under budget.
Doctors in the New England Quality Care Alliance would also take part in Vanguard’s existing programs for Central Massachusetts employers that focus on wellness.
The second venture would allow Tufts and Vanguard to offer a range of options — from clinical affiliations to mergers to acquisitions — to independent hospitals eager to bolster their financial standing and prepare for a future that will include more coordinated care. Until now, Steward and Partners — because of their heft — have held an advantage when bidding on community hospitals.
Tufts physicians group officials have begun informally briefing their 1,600 members — employees of Tufts Medical Center and affiliated doctors — about the negotiations. The doctors would have to sign off on the alliance and would be critical to its success.
“You have to bring physicians into the discussion,” said Eric Beyer, chief executive of Tufts Medical Center, which in addition to MetroWest has clinical affiliations with Lawrence General Hospital and Jordan Hospital in Plymouth. “You can’t present this as a done deal.”
It’s unclear how Massachusetts regulators will react to potential acquisitions involving money pooled by nonprofit and for-profit partners. Both parties said they would consider new or expanded hospital partnerships anywhere in Massachusetts. A representative from the state attorney general’s office had no immediate comment Tuesday.
The first test case may be Tufts’ plan to take a minority stake in MetroWest, which operates Framingham Union Hospital and Leonard Morse Hospital in Natick.
“It’s Vanguard’s way of tying our cart to Tufts,” said Erik Wexler, president of the New England market for Vanguard and chief executive of Saint Vincent Hospital, which has residency programs with the University of Massachusetts Medical School in Worcester.
MetroWest hospitals already are for-profit, and any nonprofit jointly purchased by Tufts and Vanguard would have to convert to a for-profit, according to the parties. That process requires a recommendation by the state attorney general to the Supreme Judicial Court of Massachusetts, which would have to approve the conversion. The state Department of Public Health also must grant new licenses to turn a nonprofit hospital into a for-profit organization.
Despite the organizations’ different ownership structures, Tufts and Vanguard executives said Tuesday that they have similar cultures and a shared focus on serving patients. “Our view is the best systems evolve over time because you have a common view and common values,” Beyer said.
Financially, neither partner is among the state’s best-performing hospital organizations. Tufts posted a modest profit of $7.2 million last year, while MetroWest lost $2.8 million, according to data released this month by the state Division of Health Care Finance and Policy.
Tufts, its doctors group, and MetroWest already are working together in other ways. Last month, they were awarded an $88.5 million loan by the US government to create the nonprofit Minuteman Health Initiative, the state’s first member-owned health insurance plan. It plans to offer coverage starting in 2014 to individuals and small businesses through private brokers and the Massachusetts Health Connector, the state’s online insurance marketplace.
Jeffrey I. Lasker, president of the New England Quality Care Alliance, said members briefed on the plans had plenty of questions but were excited about the prospect of strengthening Tufts’ alliance with Vanguard. “We want to preserve care at community hospitals, and increase the amount of care provided at local community hospitals,” Lasker said.
Partners chief executive Gary Gottlieb said Tuesday that he couldn’t comment on the Tufts-Vanguard alliance until he finds out more about how it will work. Steward spokesman Chris Murphy said, “Anything that keeps health care in the community is a good thing.”
The Massachusetts Nurses Association, which represents registered nurses at Tufts and Vanguard hospitals, has clashed with management at both organizations during recent contract talks.
“Our main concern is that Tufts survives and remains viable in this marketplace,” said union spokesman David Schildmeier. “We’re going to keep a close eye on this to make sure that the quality of patient care is put in the forefront of whatever happens.”
Liz Kowalczyk of the Globe staff contributed to this report. Robert Weisman can be reached at email@example.com.
Wednesday, September 19, 2012
Health care partnership
Vanguard, Tufts Medical Center are teaming up
By Aaron Nicodemus TELEGRAM & GAZETTE STAFF
SOUTHBORO — Vanguard Health Systems, the for-profit owner of St. Vincent Hospital in Worcester and MetroWest Medical Center in Framingham and Natick, said Tuesday it will partner with Tufts Medical Center to pursue the purchase of independent hospitals throughout Massachusetts, as well as pursue clinical relationships with other health systems.
The new health system, as yet unnamed, will build upon an existing set of relationships between Tufts and MetroWest that bring Tufts specialists in cardiology and pediatrics to the MetroWest campuses. The New England Quality Care Alliance, a 1,600-member doctor’s group that is affiliated with Tufts Medical Center, will also be a part of the new system.
The partnership will give both Vanguard and Tufts Medical Center more clout in negotiations with health care plans. Vanguard, in particular, has been hurt by what it has viewed as a competitive disadvantage in its negotiations because it had an alliance with Fallon Community Health Plan in the 1990s that, although now severed, has made it difficult for St. Vincent Hospital to command higher reimbursements.
Neither Tufts nor Vanguard officials would say which independent hospitals they might want to affiliate with or purchase.
Earlier this year, Vanguard attempted to affiliate with Athol Memorial Hospital in Athol. But those negotiations broke down, and Athol eventually struck a deal with Heywood Hospital in Gardner.
Vanguard spokesman Dennis Irish said the new system will seek to buy or affiliate with other hospitals in Massachusetts.
“We will seek to grow,” he said.
Officials involved in the deal said the model that Vanguard and Tufts are creating is unique, in that it will not create exclusionary relationships. In most health care partnerships in Massachusetts, providers are committed to a particular health system, while others are shut out.
Instead, the new Tufts/Vanguard health system will seek to create partnerships with other hospitals and doctor’s groups, at whatever level those groups are comfortable.
“Some local markets might be looking for their hospital to be acquired. Others might just want the clinical affiliations. Both are possible under this new health system,” said Eric Beyer, president and chief executive of Tufts Medical Center and the Floating Hospital for Children in Boston.
Flexibility will be the key.
“There are a number of options that will allow others to join in,” said Erik Wexler, New England market president for Vanguard and CEO of St. Vincent Hospital.
Lynn Nicholas, president of the Massachusetts Hospital Association, lauded the agreement.
“There is no single model that leads to success, but this clearly is an example of how the commonwealth’s health care delivery system is transforming itself to meet the challenges of the 21st century,” she said in a statement.
The partnership builds on a previous relationship between MetroWest Medical Center and Tufts Medical Center.
MetroWest Medical Center has been an affiliate of Tufts Medical Center for two years, and has been an affiliate of the Floating Hospital for Children at Tufts Medical Center for three years. The cardiology group at MetroWest is also affiliated with Tufts.
As part of the agreement, Tufts Medical Center will have a “minority stake” in the MetroWest Medical Center.
Mr. Beyer said that part of the agreement was put into place to cement the relationship between Vanguard and MetroWest Medical Center, to “make it more permanent.” But Tufts Medical Center and the Vanguard properties will continue to operate independently, he said.
Mr. Wexler said he expects the new health system will bring Tufts specialists to the St. Vincent campus.
“We do have some holes that we could fill,” Mr. Wexler said, noting that Tufts specialists could come into the new cancer center that is under construction at the CitySquare development in downtown Worcester.
A big push in the announcement is the idea of “low cost, high quality” care that, eventually, could be expanded to include hospitals and doctors’ groups from other parts of the state.
The agreement comes as hospitals across the country are grappling with deep cuts to Medicare reimbursements, which are a large part of any hospital’s budget. There has also been a backlash by employers against the rapid rise in the cost of health care plans, and they have in turn pressured lawmakers to find ways to cut health care costs statewide.
National health care reform, which is modeled after Massachusetts’ 2006 health care reform, will steer hospitals away from a fee-for-service model to a global payment model. In practice, it means medical providers will be encouraged to provide a total system of care for a group of patients, instead of being paid a fee for every procedure or test that they provide.
Tufts Medical Center is a not-for-profit academic medical center in Boston, while Vanguard is a for-profit health care group that owns MetroWest Medical Center, St. Vincent Hospital and other hospitals in Illinois, Texas, Arizona and Michigan.
Tufts Medical Center is not affiliated with the Tufts Health Plan, which was not part of Tuesday’s announcement.
The announcement comes on the heels of an $88 million grant from the federal government, unveiled two weeks ago, that will create Minuteman Health, a member-owned and governed health care plan. Minuteman will be one of the first initiatives to be launched from this new partnership between Tufts Medical Center and Vanguard, sometime in early 2014.