The state Public Health Council voted Wednesday to grant a license to transfer ownership of South Shore Hospital in Weymouth to Partners HealthCare System, a deal that would continue the trend toward consolidation of Massachusetts hospitals.
Council members, on a 9-to-1 vote with one abstention, approved a “determination of need” certificate under which Boston-based Partners, the state’s largest hospital and physicians organization, would become sole corporate owner of the 378-bed regional hospital.
But the vote was only the first step in an ongoing regulatory process. And critics of the takeover questioned whether Wednesday’s vote would trump other agencies’ scrutiny of the deal.
Public Health Council members said they were required to vote on the proposed acquisition because state law gives them only four months to act after a request is taken up. But they noted their own oversight is narrow, covering matters such as access to Medicaid and local control of hospital boards, and doesn’t include the impact of mergers on costs and competition.
Those issues are being reviewed by the Department of Justice, which examines antitrust implications of proposed acquisitions, and are likely to be scrutinized by the state’s newly created Health Policy Commission, which is focused on holding down health care costs. The state attorney general’s office has also been deemed an “interested party,” but has yet to indicate whether it plans to take part in reviewing the Partners-South Shore proposal.
Appearing before the council, Elizabeth L. Daley, senior researcher for Local 1199 of the Service Employees International Union, called on members to delay a vote. She warned the council would be turning over South Shore Hospital to “the richest and highest priced health care provider in the Commonwealth” before other regulators had looked into the merger.
“Moving forward too rapidly with any of the proposed changes in health care corporate structures and services that have been announced over the last few months — including this change in corporate control of South Shore Hospital — may have the effect of circumventing the market oversight authority of the Health Policy Commission,” said Daley.
Bernard Plovnick, director of the state Department of Public Health’s determination of need program, recommended the deal be approved, saying the council’s vote would not preclude other regulatory reviews.
He said the acquisition met the council’s own criteria and was supported by the majority of those who wrote to the department and attended a public hearing.
But he acknowledged that “the criteria we can look at is very limited.”
Partners, which owns Massachusetts General and Brigham and Women’s hospitals in Boston along with seven other hospitals, is cooperating with the Justice Department inquiry and has notified the Health Policy Commission that its plan to acquire South Shore represents a “material change” that could trigger its review, said Andrew Levine, a lawyer representing Partners and South Shore. Levine said the merger can’t take effect until those reviews are completed.
Health Policy Commission executive director David Seltz said his staff received the material change notice in the past week and has 30 days to decide whether to review the merger.
“There really are two different statutory review processes,” said Lois H. Johnson, the commission’s general council, referring to those of the commission and the public health council. “There are different standards of review and issues considered by each of them. Any decision by the council would not necessarily foreclose our review.”
Partners’ plan to acquire South Shore is one of several hospital mergers pending before regulators. Among others, Mass. General has agreed to acquire Cooley-Dickinson Hospital in Northampton, while Boston’s Beth Israel Deaconess Medical Center plans to take over Jordan Hospital in Plymouth.
Clarification: An earlier version of this story contained an outdated photo of South Shore Hospital’s Emerson Building. The photo has been removed.