SalemNews.com, Salem, MA

Local News

September 8, 2011

Hospital heads discuss affiliation, costs and health care reform

(Continued)

Health care reform will change the way hospitals are paid, to keep people well, rather than the old "fee-for-service" model.

Hanover said the affiliation with Lahey was tied to these health care changes, because even though Northeast has $500 million in revenues, "we didn't believe we were big enough."

"The market was changing dramatically," Hanover said. "Scale was going to be absolutely critical to reposition our cost and our service structure."

Grant, who is also an attorney, said he had just been hired to run Lahey this past fall when talk of a deal with Northeast came up. At first he was reluctant to tackle something like a merger, but became convinced it made sense.

Fenwick of Children's Hospital said that amid all the talk of cost-cutting, saving money should not be the only measure of a hospital's worth. Hospitals need to focus on care. Children's expansion on the North Shore means specialists from Boston can now treat children in Peabody, she said.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter @DanverSalemNews.

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