Heywood files for Chapter 11
Mass. health care system notes financial strains
Heywood Healthcare, a health care system based in Central Massachusetts, announced Monday it had filed for Chapter 11 bankruptcy.
In a news release announcing the filing, Heywood described a constellation of financial difficulties creating “a substantially challenging operational infrastructure.” This includes pandemic-era supply chain snarls, a “costly and lengthy” transition to electronic medical records, a major construction project, and low reimbursement rates.
Heywood’s “core hospital services will continue to operate as usual” in the midst of the bankruptcy proceedings, said co-CEO Rozanna Penney in the news release. (Chapter 11 is the part of the bankruptcy code that allows a business to restructure its debts in hopes of staying afloat.)
“Heywood Hospital has stood independently for 116 years, while navigating national and local challenges,” said Tom Sullivan, co-CEO of Heywood Healthcare, in a statement. “Though our health system has stood the test of time, we are not impervious to financial challenges.”
The health care group comprises Heywood Hospital, a 134bed acute care facility in Gardner; Athol Hospital, a 25-bed critical access facility in Athol; and Heywood Medical Group, which oversees providers and satellite facilities across Central Mass.
While Heywood’s financial performance has improved over the past few months, the news release said, bankruptcy proceedings will allow the health system to “better position itself to address these challenges and to regain stability.”
It will also open up “ability to explore new affiliation opportunities,” following the collapse of a proposed merger with the UMass Memorial Health system earlier this year.
Last week, UMass Memorial announced it had signed a letter of intent to explore a potential affiliation with the Milford Regional Medical Center and Milford Regional Physician Group, about 50 miles southeast of Heywood.
The bankruptcy filing comes on the heels of a tumultuous year for Heywood and amid broader instability for independent hospitals.
Following the failed merger, there was a leadership shakeup in June, with longtime president and CEO Win Brown being replaced by Sullivan and Penney as co-CEOs. That same month, construction on Heywood Hospital’s new 44,000-square-foot surgical facility was put on pause in order “to adjust the project’s legal and financial structure,” according to the group.