Twenty years ago this month, Boston’s two most powerful hospitals pronounced their desire to merge with each other and create Partners Healthcare System, the giant chain that dominates the state’s health care industry.
Hardly anyone has said “no” to Partners about anything ever since.
When it comes to medicine and money, lots of people have complained about the market pricing power created by the combination of Massachusetts General Hospital, Brigham and Women’s, and a collection of other, smaller institutions.
But none of them has been in a position to do much about it.
This week could be different. A few people actually do have the chance to throw a net over current expansion plans at Partners.
That’s exactly what they should do.
Something called the state Health Policy Commission is about to issue its preliminary opinion about a Partners plan to merge with South Shore Hospital in Weymouth, an important suburban facility. (A final vote will take place next month.) The commission doesn’t have the power to stop the merger, but it will give the state’s attorney general, Martha Coakley, a good reason to oppose that deal. The commission tipped its hand months ago, with an early assessment that the transaction would probably have a “significant impact” on the state’s ability to meet its overall health care cost-containment goal.
Partners says it wants to merge with South Shore (and other organizations in unrelated proposals) to help shape an organization that could function better in a medical future that’s focused on cost containment.
But every peep out of the commission regarding Partners so far suggests that the giant health system is part of the problem, not any solution, when it comes to controlling the cost of health care. Amid the recent rush of medical consolidation in Massachusetts, the commission has held up four transactions for closer scrutiny. Three of them involve Partners.
Coakley has been pointing her finger at Partners for years, identifying it as a leading factor driving higher state health care costs. Now she’s running for governor, and it’s hard to imagine her ignoring a critical report by a state watchdog agency.
One last person to keep in mind: Bill Baer, the man in charge of the Department of Justice’s antitrust division. People with long memories may recall Baer as the former Federal Trade Commission lawyer who blocked a Staples Inc. plan to buy Office Depot Inc. in the 1990s. His division at Justice has been investigating Partners for years now and could team up with Coakley to oppose the South Shore Hospital merger. Clearly, both are waiting on the state commission report.
So here’s one simple question for all of those people and organizations examining Partners and its impact on the Eastern Massachusetts health care market. If a merger with South Shore Hospital doesn’t bother you, exactly what would it take?
It’s hard to be critical of places and people who do amazing things to save lives every day. The money questions at Partners are also complicated by big teaching and research functions.
But it’s important to recognize Partners fundamentally as a marketing creation and acknowledge the impact of its pricing power on everyone in health care — including the people who end up on the short end of the stick. Those facts have been documented for many years by lots of people.
Merging Partners and South Shore Hospital would be another step in that direction — not dramatic, but meaningful. The public benefit of that combination would not offset the corrosive effect of diminished competition.
No one is going to unravel the Partners advantage, but the recent wave of medical consolidation has created some bigger competitors. Steward Health Care System quickly became a very large provider, even if I worry about its finances. Beth Israel Deaconess Medical Center has become more formidable — in scale and geography — and might not be done yet. Lahey Health has grown bigger to the north of Boston, an important market to Partners.
Regulators have mostly gone along with the mergers that have helped create bigger competitors for Partners. Coakley practically paved the way for Steward’s expansion. Beth Israel Deaconess has gotten one green light after another.
The latest Partners merger proposal would be something else entirely. I think it’s going to get a different kind of reception.
After 20 years, someone should say “no.”