Four hospitals just north of Boston, each solidly wedged in the bedrock of their towns, have agreed to become the foundation of a new healthcare system for community-based care.
The hospitals' three parent companies said last week their trustees had approved merging the assets of Melrose-Wakefield/Whidden Hospitals, with facilities in Melrose and Everett; Lawrence Memorial Hospital of Medford (Mass.); and Malden (Mass.) Hospital.
Melrose-Wakefield and Whidden had consolidated a year ago into a two-hospital system.
All four hospitals have similar histories dating back to the late 19th century, when they were created by community campaigns for a not-for-profit hospital in town, said John Hahesy, vice president of communications at Melrose-Wakefield.
Each hospital serves a similar population, and all are within five or six miles of each other in a diverse, densely populated service area encompassing more than 15 towns straight north of the Charles River.
But after a century of operating separately, the hospitals saw the need to create a larger system and develop efficiencies as managed care rapidly remakes the Massachusetts marketplace.
"This area must rationalize the availability of, and access to, health services because of decreasing patient hospital utilization and reduced payments for care," said Richard Quinlan, president of Melrose-Wakefield Healthcare Corp.
Quinlan said the complementary strengths of each hospital "are going to create synergies within the merged organization and provide opportunities for our institutions to support and enhance one another."
And rather than strive to become another do-it-all system in a market dominated by regional networks led by tertiary giants, the new community network will try to find its own niche, supplementing those bigger networks, Hahesy said.
Two of the hospitals already have ties to the referral network of Partners HealthCare System, formed by Massachusetts General Hospital and Brigham and Women's Hospital. An operating unit of that system, called Partners Community HealthCare, has affiliations with the physician-hospital organizations of Lawrence Memorial and Melrose-Wakefield/Whidden.
Rather than competing for business, "in most cases the Partners relationship works benefically for both," Hahesy said. The community hospitals are able to refer difficult cases to "a world-class teaching facility," while the Partners leaders "are also working to see that the primary-care business stays out here."
The merged community hospitals have a combined $280 million in assets, which include two nursing homes, three home-care agencies and multiple clinics. Their combined current operating budgets total $250 million.
A final vote on the merger must be taken by a second board of "corporators" appointed at each hospital under the not-for-profit structure of Massachusetts.
Under the preliminary merger agreement, the new organization will be governed by a consolidated, 22-member board of trustees, but each hospital will retain its name.