Baystate Health Annual Report 2023
We invite you to look back at Baystate Health’s key highlights of 2023 and explore to learn more about our organization.
Welcome to Our 2023 Annual Report
Baystate Health (BH) entered 2023 still battling the COVID-19 virus, as well as the ripple effects the pandemic had on the healthcare workforce, access to care, and financial performance. The year began with a winter surge of COVID-19, RSV, and influenza. This so-called “triple-demic” led to further strains on hospital capacity, particularly in pediatrics, despite new and better therapies to combat COVID-19. As infections wound down in the spring, the nation finally declared an end to the COVID-19 pandemic in May 2023. This allowed for a relaxation of restrictions on masking but also saw the loss of enhanced reimbursement for the virus and brought the resumption of certain regulations that had been relaxed during the pandemic. Despite the challenges, 2023 was also a time when we embraced bold initiatives to strengthen our services and our ability to deliver on our mission of providing exceptional care for our communities.
Workplace of Choice
Workforce shortages continued to stress the system, both in terms of costs for contract workers and the need for existing employees to work extended hours, risking exhaustion and burnout. Improvement initiatives were codified in a Workplace of Choice strategy and included: innovations in workplace safety; advances in institutional diversity, equity and inclusion (DEI); greater flexibility in scheduling and overall work arrangements; programs for workforce wellness and resiliency; and novel pipeline programs in collaboration with our educational and training partners. New dashboards were able to track vacancies and turnover by job category, tenure, race, and ethnicity. Salaries and benefits were adjusted to remain competitive with a rapidly moving market. As the year ended, turnover and vacancy rates were trending slowly in a favorable direction and had fallen to their lowest levels in over a year.
Access to Care
Access to care challenges throughout the year were driven by patients seeking care that had been postponed during the pandemic, an increase in behavioral health problems, and a shift in market share for BH providers and hospitals. The BH system experienced a 7.5% increase in demand for care in the past three years, as other providers in the market limited growth or exited clinical lines of business entirely. The system again responded with several innovative programs. A new office of Clinical Integration in Baystate Medical Practices (BMP) collaborated with primary care and specialty providers to open slots for both new patients and urgent same day visits for established patients, despite high vacancy rates in the provider workforce. In addition, nearly 200 new providers were added to the group. A Patient Flow Governance group was formed to manage inpatient capacity and implemented several new practices, including Clinical Care Progression rounds, a centralized approach to case management across the system, a shared admission program to load balance across all four hospitals, and complex care rounds for long length-of-stay patients. The efforts led to improvements in length of stay, emergency department boarding, and overall crowding.
Financial Stability
The unexpected viral surges over the winter, the persistent labor market challenges (both at BH and in the post-acute sector), and the shift in care from competitors to BH (mostly government funded) drove higher expenses throughout the year. Additional headwinds came in the form of salary adjustments to keep up with a rapidly changing market. The system also experienced a faster than expected transition of surgical cases from the inpatient to the lower reimbursed outpatient space. At the end of the fiscal year in September, the system experienced an operating loss. Through it all, BH continued to deliver on our mission of community health despite the stresses of the year and executed on effective strategies to grow the workforce, open access to care, and restore financial stability as the system entered 2024.
Better than most health systems, BH met these challenges and opportunities with disciplined operational execution, strong teamwork, willingness to innovate, and a deep sense of purpose. Progress on all fronts was slow but steady, and the commitment of the leadership team and all team members in the organization remained strong. The work done by BH over the last decade – on clinical integration to form a true operating company, on culture change to improve the employee experience and employee engagement, on systems to manage the risk of caring for populations, and on addressing the social determinants of health – all have prepared us well to meet this moment. While the healthcare environment nationally and particularly in western Massachusetts has become increasingly challenging, we are optimistic that Baystate Health will continue to grow stronger and play a larger role in the care of our communities well into the future.
We express our gratitude to the entire Baystate Health organization and pride in their accomplishments as we work to support our charitable mission while fulfilling our promise of advancing care and enhancing lives.
Thank you for your continued support and interest in our health system.
With gratitude,
Mark A. Keroack, MD, MPH
President &
Chief Executive Officer,
Baystate Health
Harriet A. DeVerry
Chair,
Baystate Health
Board of Trustees
Highlights of 2023
Baystate Health Partnered Project Named Finalist to Receive Appropriations, Connecting Communities to Good Jobs
In 2023, the Biden-Harris Administration, through the U.S. Department of Commerce’s Economic Development Administration (EDA), announced that the MassHire Hampden County Workforce Board (MHHCWB) and the Springfield-Holyoke Recompete Plan in Springfield, MA was named a Finalist in the Distressed Area Recompete Pilot Program. Baystate Health is a partner in this program. Funded through the CHIPS and Science Act, the Recompete Program will invest in economically distressed communities to promote job growth, targeting areas where the prime-age (25-54 years) employment is significantly below the national average. Through local investments, the Recompete Program will help support closing the employment gap by connecting historically marginalized communities with good-paying jobs. Through cross-sector collaboration, MHHCWB’s $20 million proposal will spur job growth and retention in two gateway cities in Springfield and Holyoke, putting individuals on career pathways with living wages.
BMC Opened New Surgical Operating Rooms and Interventional Spaces
Every year some 29,000 patients undergo surgery at Baystate Medical Center, more than any hospital in western Massachusetts. In 2023, our new operating rooms and interventional suites opened to support our promise of meeting the critical healthcare needs of our community and to support the technical and clinical advances in the ever-changing world of surgery. Operations needing an overnight stay will be performed in this new space including neurosurgery, cancer, cardiac, robotic surgery, trauma surgery, total joint replacement surgery, and more.
In the interventional suites, new state-of-the-art imaging and catheter-based technology will minimize open surgery and optimize procedures that involve the heart and brain. The needs of our patients were integral in the design with enhanced privacy and space for loved ones to be close during phases of care.
Baystate Health Convenient Care – Longmeadow Opened Offering Walk-in Care
In October of 2023, Baystate Health Convenient Care opened a new location in Longmeadow, MA as an extension of Primary Care offered to existing Baystate Health patients. Convenient Care offers same-day, walk-in care with extended hours to fit patients’ schedules. Caregivers at the site provide treatment for common illnesses and injuries that don’t require a visit to the emergency room including flu, minor cuts or burns, skin infections, earaches, and sprains. As part of Baystate Health, these Convenient Care locations use the same electronic records database, coordinating care with a patient’s Baystate Health primary care physician.
Advanced Practitioner Fellowship Program in Primary Care Received Accreditation with Distinction
In September of 2023, Baystate Health's Advanced Practitioner Fellowship program in Primary Care, located at the Baystate High Street Community Health Center, was accredited with Distinction by the American Nurses Credentialing Center’s Commission on Accreditation in Practice Transition Programs (also known as the Advanced Practice Provider Fellowship Accreditation, or APPFA). Fewer than 10 programs are accredited nationally and Baystate Health was the first to successfully receive Accreditation with Distinction in the state of Massachusetts. Through accreditation, Baystate Health will be able to further develop our program through self-evaluation; identification of strengths and weaknesses; on-going refinement of the curriculum; and program enhancements to meet changing practice environments.
Baystate Health Entered Strategic Relationship with Labcorp for Diagnostic Services
Baystate Health entered into a strategic relationship with Labcorp to acquire our outreach laboratory business (laboratory services for our community-based physicians) and select operating assets, including laboratory patient service centers. This partnership will standardize testing and broaden access to services and resources for our patients and clinicians by providing access to Labcorp’s scientific expertise and advanced diagnostics in areas such as oncology, neurology, and women’s health. Labcorp also established a regional laboratory in Baystate Health’s facility in Holyoke, MA, where Baystate Health will continue to provide professional support services for anatomic pathology and select specialty testing at its existing laboratory. Baystate Health retained the laboratories in each of the Baystate Health hospitals continuing to serve the needs of the inpatient, ED, and pre-operative patients and providers.
Campaign Launched for Baystate Health to Transform Health and Wellness for Community
Healthier Tomorrows: The Campaign for Baystate Health was launched to raise $70 million to bolster Baystate Health’s ability to care for the community today and in the future. Numerous supporters stepped up early, resulting in significant philanthropic investments. The funds raised so far have had visible impact—such as the Bolduc Family Courtyard and the new operating and interventional procedural rooms made possible in part by the Irene E. & George A. Davis Foundation—and less visible impacts, such as operating support for the Wellness on Wheels bus and new endowed funds.
Baystate Children’s Hospital Welcomed Isa!
Baystate Children's Hospital announced their first facility dog and welcomed Isabela (Isa for short), a 17-month-old golden retriever, to the Child Life & Healing Arts team. Isa graduated from Canine Assistants in Alpharetta, Georgia, and was able to join the team thanks to the generous support of the Dunkin' Joy In Childhood Foundation as well as the Baystate Health Foundation. Isa began working alongside one of our certified child life specialists in 2023 to provide goal-oriented care to children, families, and team members within Baystate Health. Although there are some similarities to volunteer therapy dogs, who are trained to provide more social visits for comfort and affection to people in a hospital setting for a few hours a week, facility dogs like Isa, go through considerably more in-depth education and work full-time alongside specially trained staff to support patients in meeting specific treatment goals.
President and CEO Mark Keroack Announced His Retirement
In 2023, Dr. Mark Keroack announced his plan for retirement as President and CEO of Baystate Health, effective in early July of 2024 after serving for 10 years. During his tenure, Dr. Keroack served during unprecedented times in healthcare and lead Baystate Health through the COVID-19 pandemic. Under his leadership as President and CEO, Baystate Health has expanded the reach and variety of its clinical services for patients, incorporated two new community hospitals, and has grown its outpatient practices across the region. The system has been a national leader in adopting population-based approaches to organizing and financing healthcare, emphasizing prevention, wellness, and care integration. Dr. Keroack’s unique combination of vision, hands on leadership, and commitment to the Baystate Health team and broader community it serves has been inspiring.
Baystate Medical Center Opened New Employee Appreciation Plaza
Baystate Medical Center held a grand unveiling in August for the Baystate Medical Center Employee Appreciation Plaza. This permanent employee respite area in front of the employee entrance to the Springfield Building offers covered pavilion areas with fans and power for charging, as well as flexibility for larger team meetings and events as needed. The location is in front of the entrance to the original Springfield Hospital, which was dedicated in 1889. It is the hope for many days to come, employees will utilize this space for respite to break from the day and rejuvenate their spirit.
Valley Springs Behavioral Health Hospital Opened to Enhanced Care for Patients
In 2023, Valley Springs Behavioral Hospital opened offering state-of-the-art, high quality, evidence-based, compassionate care to individuals struggling with mental health and co- occurring issues in our community. This joint venture between Baystate Health and Lifepoint Behavioral Health allows for specialized care for behavioral health patients in our region. The new facility in Holyoke offers increased capacity for inpatient behavioral healthcare for adults, children, and adolescents in the area by 50 percent. The hospital was built with the unique needs of behavioral health patients in mind and designed so patients receive their care and treatment in an environment that supports their recovery.
BFMC Celebrated First Class of Family Medicine Residents, Welcomed Second Class
Baystate Franklin Medical Center celebrated its first class of family medicine residents while welcoming the four members of its second class. The Family Medicine residency, established in 2022, is a three-year ACGME-accredited training program. While the core focus is to train family physicians, the teaching center will also educate advanced practice and behavioral health providers. The Greenfield Family Medicine Residency at UMass Chan Medical School - Baystate is the only Family Medicine program in western Massachusetts and has a defined mission to prepare health professionals to care for the under-served, rural populations of the area. It has an innovative curriculum tailored towards the broad scope of outpatient medicine and resident well-being and has integrated the most modern and progressive concepts of what family medicine is today and will be in the future.
Heart Procedure Performed at BMC First of Its Kind in Western MA
Providing the latest and most advanced cardiac care to patients throughout the region for decades, Baystate Medical Center (BMC) in 2023 was the first and only hospital in western Massachusetts to offer a new option, awake left atrial appendage occlusion (LAAO) procedures involving the Watchman or Amulet implantable device. The LAAO procedure is performed for patients with atrial fibrillation, which is an abnormal heart rhythm that affects up to 25% of Americans at some point in their lives. Patients undergoing LAAO will now have the opportunity to elect having the procedures performed with just local anesthesia and mild sedation for their comfort, known as conscious sedation, as opposed to general anesthesia. Being able to perform these procedures for awake patients means none of the discomfort and risks of general anesthesia, and most patients will be able to go home the same day. Most importantly, people with atrial fibrillation (AFib) undergoing LAAO have protection from stroke but never need to take blood thinners again.
Alliance for Digital Equity
In 2023, The Massachusetts Broadband Institute (MBI) awarded $5.1 million to Baystate Health on behalf of the Alliance for Digital Equity in western Massachusetts. Baystate Heath along with the Alliance and MBI share the purpose and primary goal of the Digital Equity Partnerships Program (DEPP) to ensure that low-income communities and households in the western Massachusetts region, including those in Hampden, Hampshire, Franklin, and Berkshire counties, have access to a wide range of digital equity support and services. The mission of the Alliance is to assure digital equity for all people, including access to the skills, computer equipment, and reliable high-speed internet needed to operate in the digital world. The Alliance believes that digital equity is necessary for people to fully participate in modern society. It plays a vital role as part of overall personal and community equity because all major parts of life - including health, housing, food, education, employment, childcare, banking, transportation, and civic engagement - have gone online.
Baystate Palmer Cardiology, Gastroenterology, and Endocrinology Services Moved to Enhance Services
In 2023, Baystate Palmer Cardiology, Gastroenterology, and Endocrinology Outpatient Specialty Practices moved to a new location within Baystate Wing Hospital as the first phase of a tiered opening of the Baystate Health & Wellness Center - Palmer. The new clinical area supports the growth of programs and services. Cardiology care includes the prevention, diagnosis, and treatment of a wide variety of cardiovascular diagnoses including hypertension, coronary artery disease, heart failure, and valve disease. Gastric conditions seen at the site include hepato-biliary disease, reflux, and bowel diseases from initial consultation to chronic management through disease remission. In addition to Baystate Wing’s Endoscopy suite, the Baystate Palmer infusion suite allows for the most up-to-date medication management for gastroenterology patients. Endocrine services provide a wide range of care for patients including those with diabetes, thyroid/adrenal/pituitary disease, and osteoporosis, and also provides gender-affirming care.
The new space provides revitalization to our existing clinics while enhancing the patient experience and improving workflow.
Baystate Noble Hospital Opioid Task Force Created
Through a legislative earmark, Baystate Noble Hospital created an Opioid Task Force for the prevention and treatment of opioid and substance use disorder. The Task Force, which is comprised of internal as well as community stakeholders, helps to organize the integration of care resources for people who use drugs and those with substance use disorder into the Baystate Noble Hospital Emergency Department and works to reduce or eliminate the existing culture of stigma. Goals are to increase access to care resources for PUD (people who use drugs); to eliminate the projection of stigma toward PUD in the ED; and to create a sustainability plan. The task force got a NaloxBox installed on the exterior of the Baystate Noble Hospital’s Emergency Department to allow public access to Naloxone (Narcan) and opioid overdose response tools in the event of an opioid overdose. The NaloxBox is maintained by Tapestry, a local, community-based healthcare, education, and support services agency.
Baystate Health Received Inaugural 2022 Mass Save Climate Leader Award
Baystate Medical Center/Baystate Health was selected in 2023 by the Sponsors of Mass Save as a 2022 Mass Save Climate Leader. As one of 19 inaugural recipients, Baystate Health is recognized for “ongoing efforts to curb energy use and lead the Commonwealth to a net zero future.” In 2018, Baystate Medical Center began generating electricity at its cogeneration plant. As part of that process, the waste heat, which is a byproduct of electricity generation, is captured before it enters the atmosphere and used to produce thermal energy (heat in the winter and cooling in the summer). This reduces the amount of fossil fuel combusted and decreases the resulting greenhouse gases by approximately 10,000 metric tons, or roughly the equivalent of removing 2400 vehicles from the road per year. In 2019, Baystate Health began installing Electric Vehicle (EV) chargers for patients and employees, and on May 16, 2022, Baystate Health signed the Healthcare Climate Pledge to reduce its greenhouse gas emissions by 50 percent by 2030 and achieve net zero by 2050.
Raymond McCarthy
Senior Vice President,
Chief Financial Officer
& Treasurer of Baystate Health
Our Financials
Baystate Health's (Baystate) financial performance in fiscal year 2023 showed signs of improvement compared to the substantial losses of 2022. Despite having seen a significant recovery we still had a $63 million operating loss or negative margin of 0.2% for the 2023 fiscal year. Overall, this performance was a $115 million improvement from the $178 million loss or 6.2% negative margin in the prior year. It's noteworthy that many healthcare organizations across the Commonwealth also continued to face operating losses in 2023.
During 2023, Baystate implemented several financial initiatives which led to approximately $180 million in combined revenue growth and expense reduction. These efforts included securing higher rates from commercial insurers, reducing expenditures on contract and temporary labor, enhancing Medicaid reimbursements, securing federal support grants, and streamlining executive positions. Despite these advancements, profitability remained elusive due to ongoing investments in workforce retention amidst competitive market conditions for salaries and benefits, as well as rising inflation affecting non-labor related patient related costs. Challenges also persisted with insufficient reimbursement from commercial and governmental payers failing to match escalating expenses.
Total operating revenues in 2023 rose by nearly 9% to exceed $3.1 billion, up from $2.9 billion in 2022. Approximately 60% of these revenues were derived from Baystate's acute care hospitals, employed provider group of over 1,200 professionals, and visiting nurse and hospice services. Another significant portion (30%) came from premiums through Health New England, the managed care health insurance arm serving over 178,000 members. Total operating expenses continued to escalate during 2023 by 4.7%.
Key balance sheet indicators for Baystate included 121 days of cash on hand, a Long-Term Debt to Capitalization ratio of 43%, and a Debt Service Coverage Ratio of 2.4 times, all metrics meeting debt service covenant requirements. Total assets at the end of fiscal year 2023 slightly increased to $2.5 billion compared to $2.4 billion in the previous year.
The independent audit by Deloitte & Touche LLP confirmed Baystate Health's financial statements for FY 2023 with an unqualified opinion. Despite maintaining A+/A ratings from Fitch and Standard & Poor’s in 2024, both agencies expressed a negative outlook due to Baystate's slower-than-expected path to profitability.
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