Commission to comment on Partners-AG deal

Predicts higher medical spending on N. Shore

The Massachusetts Health Policy Commission said on Wednesday it plans to file comments on Attorney General Martha Coakley’s agreement with Partners Healthcare permitting the company to acquire South Shore Hospital in Weymouth and two North Shore community hospitals. The commission also released a preliminary report suggesting the Partners acquisition of the two North Shore hospitals would increase medical spending in the area by $15.5 million to $23 million.

Last week, the attorney general and Partners agreed on a plan that would significantly reshape the Bay State health care landscape. While allowing Partners to acquire South Shore Hospital, Lawrence Memorial in Medford, and Melrose-Wakefield in Melrose, the agreement reins in the ability of the Boston-based system to dictate prices and absorb physician groups and additional hospitals in eastern Massachusetts. Partners also must adhere to price caps tied to the rate of inflation and allow health insurance plans to contract with individual hospitals in the Partners network, a practice dubbed “component contracting.”

The agreement went before Suffolk Superior Court Judge Janet Sanders on Monday and she rejected a bid by competitors to intervene in the case but established a 21-day comment period to allow the public to weigh in on the settlement.

Dr. Guy Spinelli, chairman of the Atrius Health Board of Trustees, warned that the deal raised more questions than it answered. Spinelli, who was speaking on behalf of a coalition including Beth Israel Deaconess, Leahy Health, and Tufts Medical Center, said the commission needed to stake out a position on component contracting, which Spinelli said had not been tried anywhere else in the country.

Partners’ ability to increase its network of doctors would come at the expense of lower cost community hospitals and physician groups like Atrius who would not be able to compete effectively, he said.

Spinelli said he also feared that Partners would benefit from a price structure that would put unaffiliated systems at a disadvantage, “provid[ing] a clear path for leading rate increases for the largest system in the Commonwealth.” He added: “We do not see how this will generate lower health care costs.”

The coalition called for the commission to take several measures, including conducting an independent examination of the settlement’s effects on health costs and consumers.

Dr. Laura Sullivan of the Cambridge Health Alliance, which serves a high percentage of Greater Boston patients who rely on Medicaid and other government health care programs, said that the settlement “would lock in and widen” health care cost disparities north of Boston. Sullivan, who delivered a baby Monday, noted that if that baby had been born by Caesarian section, her hospital, using 2009 rates, would have been paid $5,000; Massachusetts General Hospital would be paid $10,500 for the same procedure.

“The agreement widens the problem over time,” Sullivan said. “No one else gets adjustments for inflation.”

The commission plans to weigh in with its own Partners assessment during the court-ordered comment period. The agency in February opposed the Partners acquisition of South Shore and the two North Shore hospitals. Because the group lacks enforcement powers, the matter was turned over to Coakley, who opted for a settlement because she believed it would offer consumers more protection than litigation to maintain the status quo.

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Gabrielle Gurley

Senior Associate Editor, CommonWealth

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Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

A preliminary report issued on Wednesday by the commission found that the Partners acquisition of the two North Shore hospitals, which operate under the Hallmark name, would likely increase health care spending by an estimated $15.5 million to $23 million per year for the three largest health insurers; reinforce Partners’ market position as the provider with the highest share of inpatient and primary care services in the area; and, over time, increase premiums for employers and consumers.

Alan Macdonald, a Hallmark Health executive vice president, said that linking up with Partners would reap a host of benefits for his 100-year-old community health care system by helping the organization raise pre-admission and post discharge standards and protocols. “We can’t do it alone,” McDonald said. “We need to be part of a network.”