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October 15, 2012

Major changes — plus a notable acquisition — revved up Harrington HealthCare

Despite an expected loss for 2012, highlighted by recent layoffs, Harrington HealthCare will forge ahead with plans to drive volume, CEO Ed Moore said.

Not long after Ed Moore came to Harrington Hospital in 2007 as its new CEO, he organized a retreat with the board of directors, management, medical staff and community members.

The topics they discussed that leap-year day, Feb. 29, 2008, as the economy was sinking toward its lowest point in decades, was how to reverse a downward drift in revenue that had taken place at Harrington over the previous few years.

"We had lost some doctors, we didn't have a hospice program," Moore said. "We were pretty much Harrington Hospital, Southbridge-centric, I call it."

What Harrington had was cash on hand, which provided options. The group left the retreat with a half-dozen goals, and they have largely met all of them.

Harrington built a cancer center adjacent to the hospital, refurbished its lobby and updated patient rooms, changed its corporate structure to recruit more doctors, and built its presence in adjacent Charlton with a newly constructed medical building and established offices in other Central Massachusetts towns.

But perhaps the biggest change, which was largely unanticipated, came in May 2009, when Harrington signed a contract to take over the administration of ailing Hubbard Hospital in Webster.

"That grew us by probably another $18 million or so," Moore said. "It fueled the kind of growth which is atypical for any hospital in this state."

It was a major shift in the Southern Worcester County market, where Harrington was already the dominant health care force. Harrington has kept the emergency room and outpatient operations at Hubbard, while eliminating the unprofitable inpatient department. A capital campaign that aims to upgrade the ER is ongoing.

"What we did was risky, but it worked," Moore said.

The result has been impressive for a hospital in Massachusetts these days.

Revenues grew 38 percent to $128.5 million from 2009 to 2011.

"What we became was a system rather than a hospital," Moore said. "Obviously, it's been a great run and we're very proud and happy."

Harrington now employs more than 1,100 people in the region. And its provider group — which consist of physicians and nurse practitioners — sits at around 80 people, well above where it was just three years ago.

Because of its success, Harrington has acted as a beacon of sorts for Heywood Hospital in Gardner, CEO Winfield Brown said.

Similar to Harrington's shepherding of Hubbard Hospital, Heywood has just merged with Athol Memorial Hospital, which Brown hopes will benefit both institutions as well as the community.

Brown and Moore have spoken at length about strategies for growth.

"If I look due south to the Connecticut border, I see Harrington's very successful and we see them really as the basis of what we're trying to do here," Brown said.

Moore acknowledges it would be impossible to maintain the kind of growth rate Harrington HealthCare System has seen over the past three years, especially as the industry girds for major changes to care and payment models that could reduce revenue and surpluses over the next several years.

In fact, in 2012, Harrington expects to post a loss, and as a result was forced earlier this month to lay off 12 people.

But Moore has plans to try to recover from that. Harrington plans to establish a presence in Spencer with a new office and will begin wide acceptance of Fallon Community Health Plan's Medicare Advantage Plan, which Moore said should drive volume in the months ahead.

The past three years have been big for Harrington, but now it will be looking for incremental improvements where it can, Moore said.

"Now we're dealing with the realities of what we do in the real world to preserve ourselves going forward," he said.

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