Judge rejects Partners deal

Health care giant mum on next move

A SUPERIOR COURT judge emphatically rejected the deal that would have allowed Partners HealthCare to acquire three local hospitals, saying a decision to allow the takeovers would have an enormous impact on the market and ratchet up consumer costs.

The decision by Judge Janet Sanders now means that Attorney General Maura Healey, who filed a brief earlier this week staking out her opposition to the deal worked out by her former boss Martha Coakley, will void the pact and go to court if necessary to block Partners acquisition of South Shore Hospital in Weymouth.

In her 48-page decision, Sanders said one of the two basic reasons for rejecting the agreement worked out between Partners and Coakley is her concern over allowing the hospital giant to grow its already considerable footprint.

“By permitting the acquisitions, the settlement, if adopted by this court, would cement Partners’ already strong position in the health care market and give it the ability, because of this market muscle, to exact higher prices from insurers for the services its providers render,” Sanders wrote.

In addition, Sanders said the deal’s call for a 10-year-period of judicial oversight and enforcement is a job she said she was “ill equipped” to do in the evolving world of health care economics.

“This lawsuit is brought at a time when the entire health care field is undergoing enormous change,” Sanders wrote. “This court is ill-equipped to keep abreast of those changes as they unfold over the next decade or to predict at this point how such changes might affect the meaning and application of the proposed consent judgment going forward.”

Dr. Gary Gottlieb, Partners president and CEO, sent out a message to employees expressing his disappointment with the decision but stopping short of saying what the next step will be.

“The judge has said ‘no’ to an agreement that we believe would have paved a pathway to delivering high-quality care closer to home for patients and their families in a lower cost community-based setting,” Gottlieb wrote in the email. “Attorney General Maura Healey stated in a court filing earlier this week that she would void the agreement with Partners if the Judge rejects it and will take us to court if we move ahead with the South Shore Hospital affiliation.  Our leadership team will now take the time to evaluate all of our options.”

Healey said her position is clear.

“In light of the court’s ruling, it is now Partners’ decision whether to proceed with the acquisition of South Shore Hospital,” Healey said in a statement. “Our office is prepared to litigate to block this transaction if Partners chooses to move forward. We remain committed to tackling the challenge of controlling health care costs while also promoting quality and access.”

The pact was worked out after Partners announced its intention three years ago to acquire South Shore Hospital and two Hallmark Healthcare hospitals in Medford and Melrose. Coakley, who had insisted the prospect of litigation to stop the mergers was risky at best, extracted some agreements that allowed Partners to acquire the hospitals but placed restrictions on its ability to expand, acquire physician groups, and increase costs over a defined number of years.

In her brief filed earlier this week with Sanders, Healey took issue with the remedies, saying the temporary freezes and bans would do little to prevent Partners form growing too big, a position that Sanders agreed with.

“The proposed consent judgment does little to restore any part of the competition that would be lost by these two proposed acquisitions,” Sanders wrote. “And the remedies that are proposed are temporary and limited in scope – like putting a Band-Aid on a gaping wound that will only continue to bleed (perhaps even more profusely) once the Band-Aid is taken off.”

Central to both Healey’s opposition and Sanders ruling was the volume of opposition in the way of public comments and filing. Among those who opposed the takeover were a coalition of Partners competitors made up of Tufts Medical Center, Beth Israel Deaconess Hospital, Lahey Health Systems, and Atrius Health.

“We applaud the decision by Suffolk Superior Court Judge Janet L. Sanders to deny what would have been an unprecedented expansion of the market’s largest healthcare system,” according to a statement from the coalition. “Throughout the court process, Judge Sanders opened the door to public input, and for that, we are grateful.”

In addition, Sanders cited the concerns from the state’s Health Policy Commission on costs, which was unconvinced that the takeover would result in lower costs. Sanders also pointed out the cost differential for a number of procedures, a gap that was stark for even the most common procedures. Sanders noted an in-patient admission for a kidney or urinary tract infection at Beth Israel or St. Elizabeth’s Medical Center in Boston costs between $8,000 to $10,000 while a similar procedure at Massachusetts General or Brigham and Women’s Hospital, both owned by Partners, runs $31,000. She noted a spinal infusion with no complications at Beth Israel costs $40,000 while Mass. General would bill $105,000 for the same procedure.

Sanders said that, even with the agreed price caps, the difference is tough to swallow and would be even more out of line once the caps are lifted in 6-1/2 years.

“After that time period, Partners could revert to its practice of billing at prices well above inflation,” she wrote. “Those rates are undisputedly high.”

Sanders also acknowledged the “political” entanglements of the agreement. Coakley hammered out the deal with Partners in the heat of her run for governor and Sanders noted that some of her opponents filed comments in opposition. But, at a hearing in November, Sanders opined about the benefits of waiting for Healey to take office and see what she thought of the deal, a stance that drew an angry rebuke from Coakley at the time. But Sanders held on long enough for Healey to weigh in and that gave Sanders the cover to reject the deal on concerns that were shared by Healey.

Sanders touched on a wide-ranging number of issues throughout her decision, noting not only Partners’ size and impact on health care costs, but also the state’s position as having among the highest costs of health care in the nation.

She detailed opposition from a variety of sources, including the Anti-Trust Institute, the Massachusetts Association of Health Plans, and the state’s Center for Health Information and Analysis, all of whom pointed out detrimental effects of the planned mergers.

Meet the Author

Jack Sullivan

Senior Investigative Reporter, CommonWealth

About Jack Sullivan

Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe.

He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment.

Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members.

At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce.

About Jack Sullivan

Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe.

He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment.

Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members.

At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce.

Though she acknowledged the volume of comments among the 174 respondents who were in favor of the merger, she said the supporters focused mainly on the enhanced services for their communities and the residual economic benefits.

“That may be true, but that does not otherwise assist the Court in determining whether the anticompetitive effects of consolidation are addressed by the remedies set forth in Proposed Consent Judgment,” she wrote.