Delay Partners’ plans for growth
By Marjorie Decker
As Appearing in the July 6, 2014 edition of the Cambridge Chronicle
Partners wants more partners and that’s not necessarily good.
The $8 billion healthcare behemoth has received approval from Attorney General to acquire four hospitals and add 600 physicians to its high-cost, dominant system. Under the agreement, Partners Healthcare would be able to raise its costs, which are already 40 percent higher than the average in the Commonwealth. The company says this is because the quality of care is the gold standard.
There are way too many red flags in the Partners pact for lawmakers, policy setters, healthcare executives, the court and the public to let it slip by. Operators of Massachusetts General Hospital, Brigham and Women’s and Dana-Farber, among others, Partners already has a 30 percent share of the state’s healthcare market. The acquisitions and expansion will hike up that share and, consequently, the number of patients in Massachusetts who must foot Partners’ soaring bills.
According to independent financial reports, Partners’ acquisition of South Shore Hospital alone would add some $25 million to Massachusetts’ health-care costs. This is preciously what the healthcare reform act signed into law two years ago was supposed to prevent.
The attorney general's decision was the result of an antitrust suit brought by the state and the US Department of Justice five years ago against Partners. Due to the legal nature, the terms of the case are not public but seemingly restrict Partners’ growth and place a cap on expenditures. The settlement does appear to have achieved rates lower than cash-rich Partners had been getting but still incorporates an increase. Prompting one to ask: "Whoever heard of an antitrust settlement that raises prices?"
Consumers and employers must bear the burden of these higher costs as provider prices are incorporated into insurance premiums. It is not clear how high the Partners’ earnings would be permitted to go but the fact remains that other providers have been living with a 0 to 1 percent price increase.
The state settlement would certainly not close the price disparity among providers and you can bet your dwindling pocketbook that those other providers would certainly want to follow suit with their own price increases.
This financial ripple effect is one scary proposition. Add to that Partners’ ability to hire 600 more doctors, which will create a drain on other institutions that could sound the death knell for some hospitals, especially the ones that serve lower-income populations. Once again, the most vulnerable are the hardest hit.
Recently, the chief executives of Mount Auburn Hospital and the Cambridge Health Alliance joined with 17 other providers to protest the Partners deal in a letter to the Legislature. They called for postponing the implementation of the agreement until ample time had been allowed for public comment. This could be seen as a courageous call by the signatories, given they are now at the mercy of on a company growing rapidly and quickly dominated the market. It also speaks volumes to the serious concerns this should raise for all of us worried about managing the costs of high quality health care.
Not only is this a monetary boondoggle, but it could well be a physical crisis. Industry experts -- albeit competitors of Partners -- say anything that mitigates their ability to compete effectively with the platinum giant and to control costs could ultimately harm the patient. This could occur when doctors run toward the high-paying Partners affiliates, substantially draining other lower-cost providers’ resources and recruitment.
The new doctors are expected to come from existing smaller systems. The 600, roughly the size of the Lahey Clinic, will join what is already by far the largest operator in the state. Financially, Partners is roughly four times the size of the next largest healthcare provider.
I believe it is essential that we allow enough time for the actuaries to determine what the Partners ripple effect would be in dollar terms. Just how big a price increase overall will the public be forced to bear? Some experts are already saying 7 percent across the board. There needs to be public process one that is transparent and allows the public to not only ask questions but hear the answers. This should happen before Partners is allowed to move forward.
As I write, a judge is about to rule on a delay.
The format may be the independent state agency, the Health Policy Commission, which is charged under the landmark 2012 health cost containment law with monitoring the healthcare delivery and payment systems with the goal of cutting costs and improving quality.
I believe open hearings, buttressed by financial analysis, must be held and weighed by the commission, the Legislature and healthcare executives before anything so monumental as an extension of the Partners monopoly is set in stone by court approval of the attorney general’s pact.
Talk about a level playing field is probably already too late! Talk about cost containment is equally ludicrous as actions continue to have the opposite intention of the historic Chapter 224.
Marjorie Decker is the state representative for the 25th Middlesex District.
To read the New York Times July 7, 2014 editorial on the risk of hospital mergers, as related to Partners, click here.