Seacoast hospitals make final pitch for Mass General merger
By Alex LaCasse
Posted Sep 10, 2019 at 4:23 PM
EXETER -- Leaders of Exeter Hospital, Wentworth-Douglass Hospital and Massachusetts General Hospital made one last public presentation on the pending merger of Exeter with the other two hospitals in front of roughly 250 Seacoast residents at Exeter High School Monday evening.
The meeting was held by the state Attorney General Office’s Charitable Trust Unit, which will submit a final report on the disposition of charitable funds held by Exeter Hospital Sept. 23. Residents with input on how some of those funds should be allocated as a condition for approving the merger are encouraged to contact Charitable Trust Unit Director Tom Donovan’s office prior to Friday, Sept. 13.
While all attendees who spoke at the meeting’s comment section said they approved of Exeter Hospital’s merger with Mass General, the conversation generally centered around the $194 million in funds in what Donovan has referred to as Exeter Hospital’s “endowment,” combined with improving access to mental and behavioral health care. The other big topic of discussion was the possibility of higher costs for patients should the merger be approved.
Some attendees expressed displeasure with the attorney general’s office scheduling the meeting at 4 p.m., which they said made it difficult for younger families to attend.
Donovan declined to address any specific stipulations he may impose on Exeter Hospital as a condition of approval for the merger.
Of the $194 million held by Exeter Hospital, Donovan called approximately $21 million “true, donor restricted endowment” and a “substantial” amount of invested funds that are not “true endowment,” but what is called “board restricted endowment,” which totals more than $173.2 million, according to Exeter Hospital’s consolidated financials form filed with his office.
During public comment, retired orthopedic surgeon and Access Sports Medicine co-founder Dr. Bob Bear and Renee Plummer, vice president of Two International Group, made their case for Donovan to set a portion of endowment funds to set up sustaining funds for the treatment of mental illness and addiction recovery for underserved and uninsured patients. Part of his proposal included Donovan requiring a community needs assessment conducted by Hazelden- Betty Ford. He said it was unusual for a nonprofit hospital to be in possession of such a large endowment of nearly $200 million.
Roughly half the people who spoke during public comment spoke in favor of Donovan imposing some stipulations that would allocate some money toward the Bear-Plummer proposal.
“Some of that (endowment) money was from generous contributions,” Bear said. “Much of it was from higher charges for medical services we have all paid over the years. It’s the community’s money. Here is an opportunity to use some, not all, of that money to address two of the most critical health care crises in our community: addiction and mental illness.”
Exeter Hospital President and CEO Kevin Callahan said it was a positive that no members of the public expressed opposition to the merger with Mass General and WDH. He cited Mass General being ranked number one in psychiatric care by U.S. News and World Report, and said he was confident affiliating with MGH would make such resources more accessible to Seacoast patients.
“Everyone is agreeing that we have a problem in the behavioral health (and) substance abuse world; that is the amazing opportunity for this community and these three (hospitals) to come together,” Callahan said. “We may have some differences as to how we get to the solutions that as we’ve heard, whether it’s a Hazelden-Betty Ford center, working with MGH, (designated and receiving) beds, inpatient care; whatever it is. We recognize there will be multiple paths to developing care, so our community is safe.”
Mark Whitney, Exeter Hospital’s vice president of strategy and community advancement, said people concerned with the disposition of the hospital’s $173.2 million board-designated funds were only looking at “half the balance sheet.” He said this money was partially used to leverage short- and long-term debt obligations and capital purchases.
Whitney said a portion of the board-designated pool funds the $1 million in annual grants awarded to initiatives such as the hospital’s youth suicide prevention efforts. The funds also subsidize Seacoast Mental Health practitioners in working with pediatric primary care throughout the Exeter network, he said.
“Our board has a fiduciary responsibility to use the funds in an appropriate way to further the mission of Exeter Hospital,” Whitney said after the meeting. “We need to get to the point where the treatment of mental health is not distinctively different from physical health. We’re not afraid to have a conversation about how best to accomplish this, but we’re partnering with the biggest name in the field and that’s who we want to guide us to do the right thing.”
In terms of anticipated patient costs, Tony James, Mass General’s senior vice president for network development, said after the Massachusetts Legislature passed a law capping patient medical cost increases to 3.6%, excluding the cost of pharmaceuticals, his hospital began taking more risk in terms of patients who may not be able to pay for their care.
“It was our ability invest in the tools and the programs that helped us to control risk and help us keep costs down,” James said. “Because of our scale, we’re able to do things that any individual community hospital can’t do. A lot of that comes from purchasing, but a lot of it is in the other systems we can develop and spread across the rest of the system.”
Wentworth-Douglass President and CEO Greg Walker said while Massachusetts’ cap does not apply in New Hampshire, Mass General’s scale allows his hospital to take “at-risk” contracts now with Anthem and Medicare.
″(The larger scale), changes the incentives,” he said. “The old model where the more procedures you do, the more money you’d make. Now it’s the more efficiently you treat patients at the lowest possible cost, the more financially viable health system (you are).”