Healey opposes Partners deal
AG parts with ex-boss Coakley on mergers
ATTORNEY GENERAL MAURA HEALEY told a Superior Court judge on Monday that she has serious concerns with her predecessor’s deal to let Partners Healthcare take over three smaller hospitals and will file an antitrust suit to stop the mergers if the judge rejects the agreement.
Healey filed her brief in Suffolk Superior Court, telling Judge Janet Sanders that she won’t try to stop the pact hammered out between her predecessor and former boss Martha Coakley and Partners to take over South Shore Hospital in Weymouth and two Hallmark Health hospitals in Melrose and Medford. But Healey strongly signaled to Sanders, who had indicated in November she would like to wait for a change in office before making a decision, that she is okay with the judge rejecting the accord.
“Having now been sworn into office, it is my obligation, under that oath and by statute, to protect and advance the public interest and to do so exercising my own independent judgment,” Healey wrote in her brief. “I also wish to be clear with the court with respect to my response to the court’s potential decision: Should the court decline to enter the consent judgment, I fully anticipate that my office will exercise its right… to void the office’s agreement with Partners. I anticipate we then would litigate to enjoin Partners’ proposed acquisition of South Shore Hospital, and likely use additional time to further evaluate the proposed Hallmark transaction.”
In a telephone interview, Healey said she can’t see any scenario that would convince her to reenter into negotiations with Partners over the South Shore acquisition if the agreement is voided. She said the changing dynamics of the health care landscape, coupled with the market power Partners would gain from such a merger, would have a negative impact on the state’s health provider system.
Healey said she did not have any overarching concerns about the Hallmark merger, saying it was “swooped into this agreement with the negotiation,” but said that merger could be dealt with at another time.
Coakley’s settlement, worked out to avoid litigation between the state and Partners, has been languishing with Sanders since last November. Healey said her brief on Monday was in response to the judge’s comments at the November hearing. Despite raising some concerns about the Partners agreement on the campaign trail, Healey said she did not say anything definitive about it prior to now “out of respect for the process.”
Though Healey said she would “vigorously” enforce the deal if Sanders approves it, the filing gives Sanders the opening to act on concerns she has raised about the deal’s impact on health care delivery and costs in the state.
Coakley said she entered into the agreement with Partners in an effort to set some reins on the growth of Partners, which dominates the health care field in Massachusetts. The deal negotiated by Coakley requires Partners to cap price increases at no more than the rate of inflation for 6 1/2 years on all Partners contracts with insurers. It also requires South Shore Hospital to limit its price increases to no more than the rate of inflation for five years. Other terms would allow insurers to negotiate rates with individual parts of the hospital chain rather than all-or-nothing contracts with the entire system; bar any expansion by Partners for seven years; and limit the hospital giant’s acquisitions of physician groups for five years.
In defending her agreement, Coakley said she preferred the certainty of a settlement to the uncertainty of a court fight. She said a challenge to the Partners acquisitions in court could fail, which would mean Partners could acquire the hospitals with no restrictions on its operations.
Healey acknowledged the inherent risks of litigation, but said in her brief “I share with the court certain concerns” over the key points of the agreement. Healey said she is worried that, when the price caps negotiated by Coakley expire, “a larger, post-expansion Partners may wield market leverage that is greater than its current, already significant market leverage.” She also said the Massachusetts Association of Health Plans has declined to endorse the contracting restrictions, giving her pause about the efficacy of the clause. Healey said she has concerns that, even though the freeze on acquiring more physician groups is based on 2012 levels, it still allows for “meaningful growth” from the current level.
But Healey’s main concern appears to be allowing Partners to expand its already oversized footprint before extracting price control concessions.
Partners spokesman Rich Copp said the health care provider still believes the mergers will serve the communities well and is not giving up on Sanders approving the accord.
“We remain deeply committed to working with South Shore Hospital and Hallmark Health in order to deliver more coordinated care to patients in those communities at lower costs,” Copp said in a statement. “We believe strongly in this vision and we await the Judge’s ruling on the proposed consent judgment.”The hospital coalition opposed to the Partners agreement issued a statement saying it appreciated “not only the thoughtfulness with which the Attorney General approached this matter but also her timeliness in addressing her concerns to the court.” The coalition includes Atrius Health, Beth Israel Deaconess Medical Center, Lahey Health System, and Tufts Medical Center.
Healey last week reappointed Christopher Barry-Smith as first assistant attorney general, a post he held under Coakley. Some saw the appointment of Barry-Smith, one of the architects of the Partners deal and the lead attorney for the office in the case, as a signal that Healey was likely to endorse the agreement. Healey said Monday the change in direction would not have an impact on Barry-Smith’s standing or be a reflection on his work in the case.