fb-pixel Skip to main content

Insurers see cost hikes in Partners HealthCare mergers

Seek curbs in deal to acquire three hospitals

Partners is seeking to acquire South Shore Hospital in Weymouth (above) and Hallmark Health System’s hospitals in Medford and Melrose.Zack Wittman for the Boston Globe

Massachusetts health insurers said Monday that Partners HealthCare’s planned acquisition of three hospitals would raise costs for consumers across the state and called on a Superior Court judge to achieve stricter price controls and other limits on Partners before allowing the expansion to go through.

In their first public comments on the case, filed with Attorney General Martha Coakley’s office, the insurers stopped short of asking the court to block the mergers, as other groups and individuals have. But without major modifications to a settlement between Partners and Coakley, the insurers said, it would hamper their ability to contain rising premiums and add to the “dysfunction’’ of health care pricing.


“We are concerned that the proposed final judgment could increase costs for consumers and employers,” Lora Pellegrini, chief executive of the Massachusetts Association of Health Plans, wrote in a letter.

The association represents 17 health plans but not the state’s largest health insurer, Blue Cross Blue Shield of Massachusetts. Blue Cross, which accounts for about half of Partners’ commercial business, is not opposing the settlement.

“It will be important that the [attorney general’s] office have a robust monitoring process to ensure effective compliance with the terms of the agreement,” said Blue Cross spokeswoman Sharon Torgerson. “We would also suggest that no single agreement, no matter how detailed, will by itself achieve our shared goal of making quality care affordable for the people and employers of Massachusetts.”

Partners argues the mergers will increase efficiency, lower costs, and offer patients high-quality health care closer to home. “It’s no surprise that a lobbying group for the insurance companies has submitted comments that serve their own self-interest,” Partners spokesman Rich Copp said.

Boston-based Partners, the biggest and most expensive health system in Massachusetts, is seeking to acquire South Shore Hospital in Weymouth and Hallmark Health System’s hospitals in Medford and Melrose. The acquisitions are opposed by Partners’ competitors, business groups, consumer advocates, and antitrust specialists, who argue they will expand Partners’ already formidable market power and allow it to increase prices.


The Health Policy Commission, a state watchdog group, estimates the mergers could raise health care spending in the state by as much as $49 million a year and stifle competition. But Coakley, the Democratic candidate for governor, struck a deal with Partners in May that would allow the mergers, while setting price caps and limits on Partners’ growth for several years.

The settlement needs court approval. Judge Janet L. Sanders set a comment period that ended Monday. Coakley’s office has been collecting the comments and will submit them to Sanders next week, along with the attorney general’s response.

A flurry of new submissions, including from insurers, came in the days before the Monday deadline. They included comments from a coalition of hospitals, the Retailers Association of Massachusetts, Health Care for All, and MassPIRG, a consumer advocacy group, all concerned that allowing Partners to expand could increase costs.

“We have major concerns with more consolidation and less competition, that will disproportionately hurt small businesses rather than large employers,” said Jon Hurst, president of the Retailers Association of Massachusetts.

In addition to tougher price caps, insurers represented by the Massachusetts Association of Health Plans called on the judge to limit Partners’ ability to expand its network of physicians. The group also said the settlement should give insurers more choice, based on cost and geography, in selecting preferred providers within the Partners system.


Without such provisions, Partners’ acquisitions could hinder efforts to keep health care cost increases under a 3.6-percent state cap, the insurers said. They said the proposed settlement does not fix a marketplace that pays Partners hospitals higher prices than others for the same procedures.

The deal, insurers said, “could have the unintended effect of exacerbating the market dysfunction issues it seeks to address.”

Recent comments to arrive in Coakley’s office also included those from some who support Partners’ expansion plans, including many local officials.

Michael Smart, a Weymouth town councilor, called South Shore Hospital “an integral part of the Weymouth community” and said, “The proposed merger with Partners HealthCare will assure the long-term viability of this vital asset to both the Weymouth community and the South Shore region.”

A hearing on the settlement is scheduled for Sept. 29.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey
. Follow her on Twitter @priyanka_dayal.