Recent Coverage of Proposed Sale of Quincy Medical Center to Steward

Quincy Medical Center’s new owner has track record of upgrades

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By Steve Adams

Posted Jun 30, 2011 @ 10:26 AM

Last update Jun 30, 2011 @ 12:02 PM

BOSTON —

If its track record at other Bay State hospitals is any indicator, Steward Health Care System is poised to spend millions of dollars to upgrade cash-strapped, aging Quincy Medical Center.

Since it acquired the Caritas Christi Health Care network of hospitals in November, Steward has spent $116 million on new construction and renovations at the six hospitals, from new emergency departments and operating rooms to medical offices and lab space.

The Quincy Medical Center management announced Tuesday that it had reached an agreement calling for the hospital to be acquired by Steward for an undisclosed price.

Steward was formed in May 2010 with investments from New York private equity company Cerberus Capital Management. In addition to the Caritas purchase, Steward acquired Merrimack Valley Hospital in Haverhill and Nashoba Valley Medical Center in Ayer for $21 million in a deal that closed in May.

Since last year, Steward has increased its hospitals’ staffs by 220 jobs, with more than half of the new positions in direct patient care, spokesman Chris Murphy said. The system has 14,000 employees.

Staff reductions have been minimal, he said. A handful of office employees at the six Caritas hospitals have lost their jobs as Steward consolidates administrative functions in Westwood and its Boston headquarters. The savings from those jobs are being used to boost patient care, Murphy said.

Steward’s ownership has eased concerns about staffing shortages in the Caritas system, a spokesman for the Massachusetts Nurses Association said.

“There haven’t been any dramatic cuts or changes,” union spokesman David Schildmeier said.

Steward has kept most top management in place at the hospitals, ensuring a smooth transition, Schildmeier said. So far, day-to-day operations and patient care have maintained the status quo, he said.

“They’re doing a lot of renovations and investing a lot of resources in all of the facilities, which is what we need at Quincy,” Schildmeier said.

The interim CEO at Quincy Medical Center, John Kastanis, said the Boston-based health care company could give the hospital the financial backing to renovate operating and recovery rooms, the hospital’s vehicle fleet and the parking facility. Such improvements probably would not be possible if Quincy Medical Center were to remain independent, he said. The hospital has had an operating deficit in recent years, and it has $56 million in debt.

In addition to spending on capital projects, Steward has given priority to expanding physician networks and recruiting doctors for specific practice areas.

That is expected to be a focus at Quincy Medical Center if the acquisition goes through.

“(Steward) has a network of community hospitals and growing physician groups that are part of their network,” Kastanis said. “They’re spending a lot of money to support their system and entice doctors in specific areas.”

Steward has given community health centers financial incentives to get first-year physicians to join its network and refer patients to its hospitals, including Carney Hospital in Dorchester.

“Their argument is they can offer care for less than the downtown hospitals,” said Dan Driscoll, CEO of Harbor Health Services Inc. in Dorchester.

The agency usually refers four or five inpatients daily to Carney Hospital. Carney continues to admit patients without health insurance since the Steward acquisition.

Still, Driscoll worries that financial policies at Carney could change now that the hospital is owned by a for-profit company.

“If in two or three years Carney doesn’t meet their financial projections, given that they’re an investor-owned company, I would be worried about the future of Carney,” he said.

Reach Steve Adams at sadams@ledger.com.

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http://www.patriotledger.com/business/x1932924201/Quincy-Medical-Center-timeline

Quincy Medical Center timeline

By Anonymous

Posted Jun 30, 2011 @ 11:37 AM

Quincy’s hospital over the years.

1890	Quincy Hospital founded as a private corporation to treat granite workers suffering from dust inhalation. Original hospital had two wooden buildings with 25 beds and eight doctors.
1896	City starts helping to fund the hospital. For the next 23 years, Quincy appropriates $1,000 to $5,000 a year to subsidize the hospital.
1919	City takes over hospital after state constitutional amendment prohibits public funding for private hospitals.
1981	City hires private company to run hospital
1989	Changes name from Quincy City Hospital to Quincy Hospital and begins $60 million project that replaces two-thirds of its physical plant. Two hundred employees face layoffs because of $3.2 million deficit. Quincy Mayor Francis McCauley says he will consider selling the hospital.
1993	City refinances $60 million reconstruction bond that rebuilt the hospital. Hospital buys private mortgage insurance to replace the federal government guarantee on the bonds.
1996	Carney Hospital calls off a proposed affiliation with Quincy Hospital after Quincy Hospital officials reject Cardinal Bernard Law’s demand that the hospital stop performing abortions and birth control procedures.
1997	Hospital hires Brigham and Women’s Hospital surgeon to revive its surgery department after two surgeons remove wrong kidney from a patient in the previous year. It also signs contract with physicians group at Boston Medical Center to improve and run its emergency services.
1999	Formerly publicly financed hospital reaches deal to align with Boston Medical Center, switching from municipal to nonprofit. The agreement calls for Quincy to contribute $33 million over seven years from property taxes and other public money to erase part of the hospital’s debt and keep the hospital operating. In return, Boston Medical will send doctors to the suburban hospital.
2000	Christine Schuster replaces Jeffrey Doran as CEO. The hospital was on the brink of closing under the weight of outstanding debt until it received a $45 million bailout package from the state and the city of Quincy.
2001	Mayor’s budget includes a $4.5 million payment for Quincy Medical Center, part of a deal struck with Boston Medical Center in 1999 to keep the hospital open and make it so the city was not involved in the hospital’s management.
2002	Hospital reports a $5.9 million loss. A bill signed by Gov. Jane Swift gives the city more time to pay off $15 million as part of its hospital deal.
2005	Dr. Gary Gibbons succeeds Christine Schuster as CEO.
2006	The state forgives the city’s $12 million debt for the center. The hospital loses another $2.3 million in the first nine months of fiscal 2006.
2007	An audit finds that finances have improved, but the inflow of money is still insufficient to cover day-to-day expenses.
2009	Affiliation with Boston Medical Center ends, and the hospital starts talking with South Shore Hospital about a possible affiliation.
2010	Hospital scrambles to close a $4.5 million budget deficit and has a “technical default” due its financial woes.
February	Some management jobs are cut, and hospital personnel are asked to take a 3 percent pay cut and pay more of their health insurance costs.
March 1	Gary Gibbons tells the city council that Quincy Medical Center must close a $4.5 million budget deficit by Sept. 30 to survive.
March 31	Partnership talks with South Shore Hospital are called off. The same day, Gibbons says he will resign as CEO.
April 1	A day after their contract expires, Quincy Medical Center’s registered nurses file an unfair labor practice charge against the hospital and threaten to picket if the hospital board does not resume negotiations over pay and benefit concessions.
May 17	Consultant and veteran hospital administrator John Kastanis is brought in to serve as interim CEO.
May 29	Kastanis says Quincy Medical Center has a tentative agreement to form a clinical affiliation with Tufts Medical Center in Boston, an agreement that takes effect on July 1.
June 13	A temporary 2 percent wage cut takes effect after getting the approval of a union that represents about 500 service workers at Quincy Medical Center. The union agreed to the reduction in return for a six-month extension of seniority language and other provisions in their contract.
Sept. 23	The Massachusetts Nurses Association’s members approve contract with a temporary pay cut and freeze on pension contributions.
2011	After losing nearly $6 million in 2010, the hospital hires Navigant, an investment bank, to explore strategic options, including putting the nonprofit community hospital up for sale.
May	The hospital skips a monthly payment on the $60 million in bonds that it issued three years ago as it tries to find a partner to help stabilize its finances.
June	Hospital board reaches agreement to sell hospital to Steward Health Care System, a for-profit company established in 2010 by private equity firm Cerberus Capital Management.

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