Business

Healey opposes deal with Partners HealthCare

AG poised to sue to halt hospital merger plans

Massachusetts Attorney General Maura Healey.

Steven Senne/Associated press

Massachusetts Attorney General Maura Healey.

Newly elected Attorney General Maura Healey put pressure on a Superior Court judge Monday to reject a controversial deal that would allow Partners HealthCare to take over three community hospitals, saying in a court filing that she would sue to stop the mergers if the opportunity arises.

Healey’s move is a clean break with her predecessor and former boss, Martha Coakley, and another blow to Partners, which had Coakley’s support in its effort to acquire South Shore Hospital in Weymouth and Hallmark Health System’s hospitals in Medford and Melrose.

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Judge Janet L. Sanders is considering whether to approve the settlement and allow the mergers sought by Partners, the largest health care system in the state, to go forward.

“I wanted to express my concerns with this deal. I wanted to be real clear with the court,” Healey said in an interview. “My office is prepared to litigate.”

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Healey echoed critics of the deal who argue it would give Partners too much market power and would raise costs, making her argument in a three-page document filed in Suffolk Superior Court. Her filing comes less than a week after she assumed office following her election in November.

Partners spokesman Rich Copp said the health system remains committed to its acquisition plan. Partners has said the expansion would allow it to provide more coordinated, lower-cost care to patients north and south of Boston.

“We believe strongly in this vision and we await the judge’s ruling on the proposed consent judgment,” Copp said.

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If the court approves the settlement, Healey said, she will enforce it. But if Sanders rejects it and Partners moves ahead with the mergers anyway, Healey said she will sue on antitrust grounds to block the deals.

Healey, however, acknowledged that the outcome of such a suit would be uncertain.

The state Health Policy Commission last year criticized the proposed mergers, saying they would raise costs for consumers. Sanders also expressed reservations during a hearing in November, suggesting she wanted to hear from Healey before issuing a ruling.

In her filing, Healey said she was concerned that the settlement would not provide sufficient protections, in part because it would expire in five to 10 years and allow Partners to expand before showing it can control costs. Partners, which owns the renowned teaching hospitals Massachusetts General and Brigham and Women’s, is the state’s most expensive health care network.

“One of the greatest challenges our state faces is rising health care costs,” Healey said. “I’d like to see how [Partners’] work in the market is helping to contain costs.”

“This is a very gutsy move,” said Richard Brunell, general counsel for the Washington-based American Antitrust Institute, an advocacy group that opposes the settlement. “It will almost certainly doom the settlement. Given the judge’s reservations in the first place, I’d be very surprised if she went forward and [approved the deal].”

Healey said she came to her position after reviewing comments from many groups that have weighed in, from insurers to state officials. The mergers have strong opponents, but many residents and politicians in Weymouth, Medford, and Melrose support the expansion plan, citing Partners’ high-quality care.

The Partners settlement was completed in May after Coakley and federal officials spent five years investigating the health system’s market practices. Both Coakley, who was running for governor at the time, and Partners executives had hoped for swift court approval.

But the matter soon become embroiled in controversy, opposed by competitors, antitrust specialists, and consumer advocates.

Healey was a top lawyer in Coakley’s office for seven years, and her work included a role in the Partners investigation. Healey left her job in the attorney general’s office in October 2013 when she announced her campaign for attorney general.

Those who oppose Partners’s expansion welcomed Healey’s remarks.

“If providers want to come together, they need to demonstrate up front their ability to control costs,” said Lora Pellegrini, chief executive of the Massachusetts Association of Health Plans, an insurers trade group. “I think Attorney General Healey shares the concerns we have.”

A lawyer representing Partners competitors, Andrea Agathoklis Murino, said, “We’re delighted Attorney General Healey took the time to think this through.”

Murino represents a coalition including Beth Israel Deaconess Medical Center, Lahey Health, and Tufts Medical Center.

Health care analysts said a settlement that once seemed certain to be approved now looks doubtful. With Partners’ chief executive, Gary L. Gottlieb, scheduled to step down soon, it would be up to his successor to determine whether to continue fighting for the acquisitions or take a different approach to its health care strategy, said John E. McDonough, a professor at the Harvard School of Public Health.

“This is a sea change,” said McDonough. “This seems to be the signal that Judge Sanders was seeking. What’s particularly compelling is the specificity of the attorney general’s objections. That’s refreshingly straightforward in clarifying for everyone concerned what seems to have gotten lost in the political back and forth.”

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey @globe.com. Follow her on Twitter @priyanka_dayal. Robert Weisman can be reached atrobert.weisman@globe.com. Follow him on Twitter @GlobeRobW.
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