GloucesterTimes.com, Gloucester, MA

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March 28, 2013

Lahey eyes 'distressed' funds for AGH

Lahey Health, the $1.5 billion nonprofit regional health system created last year through the merger of the Lahey Clinic and Northeast Health System, has agreed to seek “distressed hospital funding” for Gloucester’s Addison Gilbert Hospital, which became non-self supporting as a long term stand-alone community hospital roughly 20 years ago.

The state last year created a Health Policy Commission as part of a major initiative in health care cost containment. The purpose of the commission was to begin to level hospital costs between the world-renowned teaching hospitals in Boston and the regional and community hospitals, and slow the overall growth of hospital costs. As part of the legislation, the commission was assigned to create a “distressed hospital fund” of a reported $135 million, obtained via a one-time assessment of the insurers and the major health care systems.

The method of assessment and competitive grant selection among applications for the distressed hospital funding has not yet been determined, but Alan Sager, a professor at Boston University’s School of Public Health, said the number of acute care hospitals has been reduced by one half to about 65 since 1993.

”This is the latest and most formalized program to help hospitals that are thought to be needed but are needy,” said Sager, who has studied and commented on the generation-long effort of Cape Ann to keep Addison Gilbert, which was founded on Washington Street late in the 19th century, and quickly became a beloved Cape Ann institution.

At the time the state approved the Lahey-Northeast merger last March, the Department of Public Health required that Lahey Health maintain AGH with all its services including the Emergency Department, Intensive Care Unit and existing ward of inpatient beds for three years.

Lahey Health has repeatedly asserted that AGH has an essential place in its long-term business plan.

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