Northeast Health CEO sees community 'partnership'

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Ken Hanover, CEO of Northeast Health System, Inc., discusses the plans for Addison Gilbert Hospital, including seeking six additional primary care physicians during an interview at the Times’ office on Tuesday. Kate Glass/ Gloucester Daily Times

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April 17, 2010

Northeast Health CEO sees community 'partnership'

Hospital chief says physician recruitment is key to growth

By Patrick Anderson Staff Writer The Gloucester Daily Times Sat Apr 17, 2010, 10:16 PM EDT

Northeast Health Systems CEO Ken Hanover is calling on Gloucester residents, reluctant partners of his company in the past, to help boost the fortunes and future of Addison Gilbert Hospital in a shifting health care landscape.

Addison Gilbert needs six additional primary care physicians to provide optimal service to Cape Ann's 45,000 residents, Hanover said during an interview at the Times and in a visit to Gloucester City Council Tuesday.

Those new primary care physicians, which would bring the total to around 15, are the key to generating the referrals needed to attract more specialist services and bolster facilities at the hospital, said Hanover, who was hired last fall.

"If we are going to have a strong community hospital, the community needs to support it," Hanover told City Council. "When you need diagnostics and testing, go to AGH. It is more than just lip service."

Hanover vowed to keep AGH open and, with the support of the community, maintain the eight core services required by the state in a full-service hospital.

He said the recruitment of more primary care physicians is the first step in a growth effort that will hopefully bring more specialists to the area as well, to draw from the added primary care doctors' referrals. Some in the community have questioned whether some of those services, including 24-hour emergency services, surgery and anesthesiology, are truly provided at the hospital.

The effort to recruit more doctors to Cape Ann comes at a time of rapid change in the health-care industry that will likely lead to fundamental shifts in the way medical care is paid for.

The federal health care reform bill passed by Congress last month is likely to cost Northeast Health System $60 million in reduced Medicare reimbursements alone over the next 10 years, Hanover told the Times.

And those direct costs do not take into account a more basic shift away from the current pay-for-service system toward a value-based payment system.

That fundamental shift, Hanover said, will likely change the structure of health-care providers toward more consolidation and a focus on providing more efficient care with fewer services used and reduced costs.

The possibility of Northeast merging or forming a partnership with another hospital company, such as the Burlington-based Lahey Clinic, has been a persistent rumor.

Hanover declined to comment any specific negotiations, but said Northeast Health Systems has been in discussions with several organizations.

A recent report from state Attorney General Martha Coakley on health care cost drivers showed that larger health care providers with market leverage are commanding far higher payment rates from insurers than smaller organizations.

The report shows that Northeast Health System, which includes Beverly Hospital as well as Addison Gilbert, is now being paid less from major insurers for the same procedures than North Shore Medical Center, which is aligned with the massive Partners network and Massachusetts General Hospital. Last year, Partners opened the Mass. General North Shore Center for Outpatient Care in Danvers, a few miles down Route 128 from Beverly Hospital.

Over at Addison Gilbert, Hanover said Tuesday there are no current plans for expanding facilities, but that the recently opened cancer center is doing well and serves as a model for the company's outpatient strategy.

Asked by councilors Tuesday how the hospital can attract more primary care physicians, Hanover said doctors want a "good lifestyle" and support from the community.

Patrick Anderson can be reached at 978-283-7000, x3455, or panderson@gloucestertimes.com.