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Medford hospital sharply cutting inpatient services

Hallmark Health System plans to significantly slash inpatient services at its struggling hospital in Medford beginning this fall, the company said Wednesday.

Officials said they plan to close 50 of the 98 inpatient beds at Lawrence Memorial Hospital, including all 40 medical/surgical beds and all 10 intensive care beds. Medford-area patients who need those services would be directed to Hallmark’s other inpatient facility, Melrose-Wakefield Hospital in Melrose.

The remaining inpatient beds in Medford would serve psychiatric patients only. Emergency services, urgent care, and many outpatient services — including weight loss, sleep, and diabetes programs — would remain open.

About 65 people are expected to lose their jobs as a result of the planned changes. “We are making every effort to place within the Hallmark Health System those affected,” Hallmark spokesman Rob Brogna said.


The health system, which has been losing money, had announced 57 layoffs in November.

Many community hospitals have struggled to turn a profit and stay competitive in the changing health care industry, and Hallmark, with its hospitals located just north of Boston, faces acute competition from the many brand-name academic medical centers a few miles away.

Hallmark still needs to file its latest plans with the state Department of Public Health.

The company’s chief executive, Alan G. Macdonald, told employees about the changes in an e-mail. He said the limited number of patients coming to Lawrence Memorial Hospital for medical, surgical, and intensive care is financially unsustainable.

“Average daily census for inpatient medical/surgical patients is only 17 . . . and the average daily census in the Lawrence ICU is one or two patients,” Macdonald said.

He noted that changes in health care now mean many more services are delivered in outpatient settings, instead of requiring patients to stay overnight. Nearly 60 percent of Hallmark’s revenue comes from outpatient services.


“Our current structure of care across the system is not keeping pace with changing times,” Macdonald said.

Hallmark, a nonprofit health system, lost about $24 million on operations in the fiscal year that ended Sept. 30, 2016, according to financial statements filed with the state. That was up from a loss of about $9.1 million the previous year. Revenues dipped slightly to about $294.6 million.

Macdonald told employees that the company is on track to lose money again this year, about $16 million.

For several years, Hallmark had planned to be acquired by Partners HealthCare, the parent company of Massachusetts General and Brigham and Women’s hospitals. Partners had planned to reduce inpatient services at Lawrence Memorial Hospital, converting it to a short-stay hospital.

But Hallmark and Partners dropped their merger plans in late 2015 after ongoing concerns from Attorney General Maura Healey and others that the deal would bolster Partners’ already great market power and raise costs for consumers.

Hallmark then went looking for a new merger partner. In January, it became part of Wellforce, the parent company of Tufts Medical Center and Lowell General Hospital.

The planned changes at Lawrence Memorial Hospital are not related to the Wellforce merger, Brogna said.

Medford Mayor Stephanie M. Burke’s office did not respond to a request for comment Wednesday.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.