BEVERLY — Northeast Health System announced yesterday that it will merge its two behavioral health agencies as part of the company's ongoing effort to adapt to the changing health care environment.
The merger will combine Peabody-based CAB Health and Recovery Services with Beverly-based Health and Education Services. Both are owned by Northeast Health System, the parent company of Addison Gilbert Hospital in Gloucester and the Beverly Hospital.
The merger will result in the layoffs of an unspecified number of mainly administrative personnel, said CAB President and CEO Kevin Norton, who will oversee the merged agencies.
Northeast Health System CEO Ken Hanover said in a statement that the merger is part of the company's effort "to ensure that we are maximizing efficiency, controlling costs and providing the best patient care."
"With increasing costs and the changing world of health care, it is essential that we anticipate demands and take common-sense measures as this to ensure that we can provide the best care over the long term," he said.
CAB and HES operate dozens of outpatient, inpatient and residential programs throughout the North Shore and beyond for adults and children with issues ranging from mental illness to substance abuse to HIV and AIDS. Programs include detox centers, halfway houses, methadone clinics, Head Start classes for low-income children and a private high school for students with emotional problems.
The two agencies have a combined $72 million budget with 1,550 employees and 36,000 clients. Norton said the merger will mean layoffs for some of those employees, although he didn't know how many.
"It will be more with the administrative staff than the clinical delivery staff," he said.
Norton said 70 percent of CAB and HES patients are treated through the federal Medicaid program and another 20 percent through state and federal contracts. One goal of the merger is to reach more patients through the doctors and hospitals of Northeast Health System, he said.
"We have a history of opening our offices and expecting people to come to us," Norton said. "We want to start embedding our services within the hospital system."
The newly combined agency will get a new name that has not yet been determined, Norton said. He said officials want to market and promote the services that the agency has been providing for years with little fanfare.
"We are two organizations servicing 36,000 people with a $72 million budget, and most of the North Shore community has no clue who we are," Norton said. "Philanthropy is a huge part of how we survive and remain viable, and name recognition helps with that."
Paul O'Shea, the president and CEO of HES, will be promoted to a senior executive position at Northeast Health System, according to a press release.
Staff writer Paul Leighton can be reached at 978-338-2675 or by e-mail at pleighton@gloucestertimes.com.
two becoming one
Health and Education Services
Founded in 1970
Operates 60 programs at 25 sites in 40 communities
$52 million budget
1,200 employees
25,000 clients
Main office in Beverly
CAB Health and Recovery Services
Founded in 1958
Operates programs in Salem, Danvers, Middleton, Lynn, Woburn, Tewksbury, Boston and Middleton Jail
$20 million budget
350 employees
11,000 clients
Main office in Peabody
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