If Partners HealthCare System swallows up three more hospitals and hundreds more doctors, it will forever change the health care landscape in Massachusetts. The antitrust settlement that Attorney General Martha Coakley reached with Partners last week should not be the last word on the issue.
What Coakley calls a “final resolution” was filed last week in Suffolk Superior Court. In exchange for capping price increases at the rate of inflation, the deal allows the state’s dominant health care network to acquire three hospitals, including South Shore in Weymouth. A team of rival hospital systems, doctors’ groups, and business leaders is trying to make the settlement less final by seeking, at a minimum, a 45-day public comment period and subsequent hearing.
The rivals deserve that much. So do Massachusetts consumers, who will be affected by a decision that stands to drive up health insurance premiums and could lead to the closing of local community hospitals.
Coakley — who is running for governor — argues the agreement restricts Partners’ growth and will lower future health costs. Partners says the same. But its rivals argue credibly that it gives a growing monopoly permission to extend its reach, while doing nothing to reduce the higher billing rate already built into the Partners business model.
Going up against both Partners and an attorney general who could be the next governor of Massachusetts is not for the faint of heart. Besides, such open, direct confrontation is unprecedented in the traditionally polite world of Boston’s elite hospital CEOs. But a meaningful public debate on the Partners deal is in the public interest.
While people may not price-shop for hospitals, they do notice when insurance premiums increase and deductibles rise — another likely side effect of these mergers.
For years, Partners’ rivals grumbled mostly to each other about the explosive market gains of a competitor that parlayed two Harvard-affiliated teaching hospitals into what is now the largest health care system in the state. They were wary of crossing Partners, given its legendary political and business clout. But, when Coakley brokered this agreement, a tipping point was reached. The private grumbling went public, and Atrius Health, Beth Israel Deaconess Medical Center, Lahey Health System, and Tufts Medical Center united to complain.
“We found the depth and scope of this agreement to be so vast and so long-lasting and so potentially deleterious to the marketplace and to Massachusetts, we felt compelled to stand up and say something,” said David Spackman, Lahey’s general counsel.
The agreement ends a five-year inquiry by Coakley’s office and US Department of Justice into Partners’ acquisition and contracting practices. A 2008 Globe Spotlight Team series found that hospitals in the Partners network were typically paid 15 percent to 60 percent more for essentially the same work as other hospitals. As attorney general, Coakley conducted studies which also concluded that Massachusetts insurance companies pay some hospitals and doctors twice as much as others for essentially the same patient care.
Under this agreement, Partners can go forward with its acquisition of South Shore Hospital, Lawrence Memorial Hospital in Medford, and Melrose-Wakefield Hospital. The attorney general’s office maintains authority to review any proposal involving Partners’ planned acquisition of Emerson Hospital in Concord for antitrust considerations. Partners can also recruit new physicians to its network; the projected number ranges from around 400 to 600, depending on who is doing the estimating.
If you’re a Partners rival, none of this is good news. For many consumers, the downside may not be as evident. The Partners brand is associated with top medical institutions, such as Massachusetts General Hospital and Brigham and Women’s Hospital. Conditioned by access to Harvard teaching hospitals — and health insurance — Bay Staters are less apt to choose their medical care by price than by the facility’s reputation.
But over time, the public will be paying more for health care under this scheme. That’s what’s happening across the country, as hospitals adopt the bigger-is-better model common throughout the private sector. If you prefer a lower-cost option in your community hospital, it could disappear if an enlarged Partners squeezes out its rivals. And while people may not price-shop for hospitals, they do notice when insurance premiums increase and deductibles rise — another likely side effect of these mergers.
We are used to one-party politics in Massachusetts. Are we also ready to accept one-hospital-network health care?
Monopolies always come with a price. If there’s no public-comment period, there will be no official way to ever hear that side of this healthcare story. That’s the public debate we should have before any judge signs off on this agreement.