Are the Partners hospitals really partners?

The uneasy alliance of MGH and Brigham and Women’s

First of two parts

PARTNERS HEALTHCARE has been in the news a lot lately.

First, on January 22, Partners started to spread the word about a plan for Massachusetts General Hospital to build a 12-story, two-tower facility on its main campus for inpatient and outpatient care.  The new inpatient facility will include 450 beds in single room configuration—with as many as 200 of them being a net addition to the MGH total.

On wonders if the timing of this announcement, after approval of the creation of BI-Lahey, was purposeful. Perhaps Partners is hoping such a bed expansion project is likely to get less scrutiny at a time when governmental overseers and consumer advocates may be  falsely lulled by the feeling that Partners may now have some “real competition.”

Then, at what appears to be a previously unscheduled Partners board conference call on January 28, Dr. David Torchiana, Partners’ CEO for about four years, abruptly announced his resignation effective May 1.  This announcement took place apparently without any sort of previous plan for naming a successor; not exactly the smooth sort of leadership transition one would expect at one of our nation’s leading health care systems.

Partners CEO David Torchiana announced his resignation effective May 1 without a plan in place for a successor.

These two announcements have stimulated media focus on Partners and speculation about where it is heading.  It has also focused some discussion on how Partners and its two flagship hospitals view and interact with each other.

Let’s start with how we got here.

Long before there was Partners, there was Mass General and Brigham and Women’s Hospital. As the two largest and most prestigious of the Harvard teaching hospitals, they have been competitors for years, both clinical patients as well as funding for biomedical and clinical research.  The creation of Partners did not really check the competition. To this day, if you ask the clinical staff at either hospital who their main competitor is—a large majority of the time, they respectively name each other rather than any other entity in Boston or elsewhere. Indeed, they often have unflattering things to say about each other.

Staff from both hospitals, however, are also quick to share their common dislike for the parent organization Partners and its range of affiliates.  For the most part, hospital staff, especially doctors, often see Partners central and its administrative functions as adding little value to their work or perspective. They view Partners as just bringing them additional overhead costs and burdens from having to sit through additional meetings. Many key issues and functions will have a MGH, BWH, and Partners committee or staff often devoted to the same function.  The Partners-level committee usually focuses on how an issue is dealt with everywhere in the system except for MGH and BWH, and the hospitals tend to only trust their own people to process a decision. They especially mistrust people from the other flagship hospital.

If the two hospitals and their doctors never really wanted to work with each other, then why was Partners created?

The conceptual origins of Partners took place in the early-to-mid-90s era, when the Clinton Health Plan was being discussed and had not yet gone down to defeat.  The hospital industry, in that era of prospective health care reform, was talking about creating community care networks built around a seamless continuum of care and fueled by capitated payment—not much different than what today undergirds the concept of accountable care or population health management.  Then like now, these terms tend to get hijacked by the hospital field to make sure that they remain the center of the health care universe

Dr. Richard Nesson, who oversaw the merger of MGH and BWH, was a national hospital thought leader and co-founder of the Harvard Community Health Plan. Along with Partners CEO Dr. Sam Thier, who came from MGH, the two health care executives seemed to want to embrace the community care network concept in creating Partners.

I am told by people who worked with them at the time that their vision, affected by the national discussion about the need for capitation and more empowered primary care, was to help move both hospitals forward by evolving away from a fragmented fee-for-service system built around a specialty care referral model, and instead help their tri-partite mission hospitals succeed in a world of capitation and better integrated care.  At a time when many (wrongly)  predicted that all health systems would need to live with more limited resources, a key consultant, hired to help facilitate the merger, told the hospitals that they could reduce annual operating expenses by between 12 percent and 28 percent if they were willing to do so.

As history shows, they were not willing to do so—or for that matter, ever appeared to even have a plan.

Sadly, just like the Clinton Health Plan that failed to materialize nationally, this vision of finding efficiencies went by the wayside within a few years. Instead, Partners, while continuing to build out its physician network, seemed fueled by the idea that fee-for-service was here to stay and the primary purpose of Partners became something else – increasing commercial insurance reimbursement paid to the two flagship hospitals, their doctors, and their system affiliates so that they could do spend and invest as they saw fit. The new system served to reduce any price pressure placed upon them in commercial insurance negotiations—a pressure that would have remained had both hospitals and their doctors remained separate, competing entities.  Even as reimbursement over time has increasingly moved to global payments, the global rates paid to Partners are still built off its historic and generous fee-for-service pay levels and often come with supplemental and bonus payments that it receives from insurers—at rates much above its competitors.

For those new to health care or state government, they likely missed the Boston Globe 2008 Spotlight series that revealed how William Van Faasen, the CEO of Blue Cross Blue Shield of Massachusetts, cut a deal in 2000 with Thier setting the stage for the affordability challenge we face today in our health care market.  The Spotlight series detailed how our state’s largest health insurer agreed to give Partners hundreds of millions of dollars in price increases—so long as Partners would, in return, demand similar percentage increases from Blue Cross competitors: Tufts Health Plan and Harvard Pilgrim Health Care.

The deal both enriched Partners and helped to greatly aggravate the provider price variation issue that we still are confronted by today. It also helped maintain Blue Cross’s position as the state’s largest health insurer, assuring its profitability by avoiding the loss of customers it would have likely lost if it faced premium price competition with its competitors.

It was understood from the beginning that Mass General and Brigham and Women’s would be organized as essentially separate kingdoms with some sort of geographic dividing line (the Mass Pike some have said) for referrals, clinical affiliations, and merger partners.

Today there is essentially no clinical care integration across the two hospitals and there has never been a merging of any clinical departments.  It was generally understood that doctors from the two hospitals would not have to work with each other and they would not be pushed to do so—unless on their own accord they truly valued it for some reason.

In defense of their pursuit of separateness, it can be argued that both institutions are doing well attracting patients so there are no real economies of scale to be achieved by the two hospitals merging clinical services or working together in a coordinated way. With organ transplantation, however, duplication is harder to justify, but Partners has never seemed to want to force these more difficult conversations on competing doctors from the two flagship institutions. The 2008 Boston Globe Spotlight Series story affirms this reality.

The two hospital cultures are different. One has a unionized nursing staff and the other does not.  It took many years for the two hospitals to even agree to have a common enterprise information system platform.  And while there is some effort to build better and more integrated systems of care within their own organizations across departments, or with their own community affiliates, it is not with each other.

In the medical education realm, there are only a few residency training programs jointly sponsored by the two hospitals plus a few fellowships.  Research is an area where there are some collaborative efforts involving staff at both hospitals, but I am not able to evaluate the extent of their working together in this realm.  Many of my friends who are researchers at one of the hospitals tell me that there is sometimes a parallel group of researchers at the other hospital—with Brigham and Women’s, located in Longwood, often having collaborations with  the other Harvard hospitals in the area. Mass General tends to go it alone in the research realm.

Meet the Author

Paul A. Hattis

Associate professor, Tufts University Medical School
Coming up next week: Where Partners is headed and the implications for how our health care market is functioning and its affordability.

 Paul Hattis is an associate professor at the Tufts University Medical School.