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October 2, 2023

Heywood Healthcare files for bankruptcy

PHOTO | Courtesy of Google Maps Heywood Hospital in Gardner

Heywood Healthcare, the entity operating hospitals in Gardner and Athol, has voluntarily filed for bankruptcy after a challenging year in which its CEO was removed from leadership, a multimillion dollar construction project was stalled, and its planned merger with the largest healthcare system in Central Massachusetts fell through. 

Amid its financial challenges, the healthcare system has filed for protection with a petition to the U.S. Bankruptcy Court for the District of Massachusetts under Chapter 11 of the Bankruptcy Code, according to a Monday press release from the healthcare system. This allows the business to remain open while restructuring financial obligations.

Heywood cited a lengthy and expensive electronic medical record transition, workforce challenges, and supply chain issues as reasons for its revenue shortfall. 

Heywood has two hospitals in its system: a 134-bed facility in Gardner and the 25-bed Athol Hospital. Heywood Healthcare also operates Heywood Medical Group, which has an 86-bed mental health and substance abuse recovery facility in Petersham. 

Heywood Hospital is one of the only remaining independently operated healthcare systems in Massachusetts, along with Milford Regional Medical Center, which just announced a potential merger with Worcester provider UMass Memorial Health.

Heywood was previously pursuing affiliation with UMass Memorial Health, but the merger was called off in January

“Heywood Hospital has stood independently for 116 years, while navigating national and local challenges, which include Heywood being one of the lowest commercially reimbursed hospitals in the commonwealth. Athol Hospital has operated for 73 years and remains a hallmark critical-access hospital. Though our health system has stood the test of time, we are not impervious to financial challenges,” Tom Sullivan, co-CEO of Heywood Healthcare, said in the press release.

In June, Heywood Healthcare replaced its longtime CEO with two executives and shortly after paused construction on its $29-million surgical pavilion.

The bankruptcy is a strategic move to address pressing fiscal challenges, Sullivan said. Core services at the hospital will remain accessible.

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