Judge delays decision on Partners accord
Action on merger put off to Nov. 10
A Superior Court judge raised serious concerns Monday about an increasingly controversial deal that would allow Partners HealthCare to acquire three community hospitals, and she moved her decision on the transaction until after the November election.
Judge Janet L. Sanders scheduled the next hearing for Nov. 10, meaning Partners' nearly three-year effort to merge with South Shore Hospital in Weymouth and its subsequent move to take over hospitals in Medford and Melrose could be delayed for months.
"I do have some very substantial concerns about the impact of this," Sanders told a crowded courtroom. "I'm sure there's significance to it, particularly in the efficient delivery of high-quality health care, but where I have serious concerns is the impact the settlement has on Massachusetts, on the health care costs for all Massachusetts citizens."
Sanders is reviewing a settlement negotiated by Attorney General Martha Coakley, which would allow Partners to expand south and north of Boston, while setting price caps and other limits. Coakley, now the Democratic candidate for governor, announced the agreement in May.
The court process could continue through a political changing of the guard. A new governor and attorney general will be elected on Nov. 4 and take office in January. The state's new top lawyer would oversee the settlement, if it were ultimately approved.
But the proposed mergers, even with the limits negotiated by Coakley, have come under fire from insurers, Partners' competitors, independent antitrust experts, and consumer advocates who say the limits don't go far enough to check the market power of what is already the state's biggest health system. Boston-based Partners owns a network that includes Brigham and Women's and Massachusetts General hospitals and more than 6,000 physicians.
Critics say adding South Shore Hospital and Hallmark Health System's hospitals in Medford and Melrose would give Partners more influence over pricing and lead to higher costs across the state health care system. Partners executives say they want to bring high-quality care to patients in community settings and deliver it more efficiently.
In court, Sanders noted that much of the opposition comes from groups that have no financial stake in the mergers, such as MassPIRG, a consumer advocacy group; Health Care for All, a health policy group; and the American Antitrust Institute, a Washington think tank that promotes market competition.
The Health Policy Commission, a state agency, has said that without sufficient limits, the mergers could stifle competition and raise health care costs as much as $49 million a year.
"This is the first time I have ever had this kind of opposition to a consent decree," Sanders said, highlighting the unique nature of the Partners deal. "It's pretty strong stuff."
The judge said she read the hundreds of pages of public comments as they were submitted over the last several weeks, but she has not yet pored through the lengthy responses from Coakley and Partners, which were submitted late last week. "There's simply too much material here to digest," Sanders said. "I'm not going to rush to a decision."
Sanders said she was aware her decision could have implications for the state's entire health system, not just the particular hospitals involved. But Bruce D. Sokler, a lawyer representing Partners, urged the judge to keep her focus on the settlement, not on the larger industry.
"This is the wrong venue for that," Sokler said. "This is an antitrust settlement. Your job is not to fix the health care policy system in Massachusetts."
The pact includes restrictions on how Partners contracts with insurance companies and limits on future acquisitions for seven years. It also requires Partners to keep price increases within the rate of the inflation and to hire an expert to track its progress for a decade.
Coakley amended the deal last week by capping price increases for patient services at the Hallmark hospitals, similar to a cap already proposed for South Shore Hospital. Given that change, Sanders opened another comment period Monday, which ends Oct. 21. The attorney general will have until Oct. 31 to respond to those comments.
"We believe the court, after fully reviewing our comprehensive response, will appreciate that the immediate and broad remedies of the consent judgment are better than uncertain and prolonged litigation," Coakley's spokesman, Brad Puffer, said in an e-mail.
Peter Brown, chief of staff at Partners, said the health care network remains committed to the settlement and "looks forward to the next steps."
At a Nov. 10 hearing, the judge will ask lawyers from Coakley's office and Partners to explain why they believe the settlement is in the public interest. Sanders is not expected to make a decision the same day.
"The stakes are high," said John E. McDonough, a professor at the Harvard School of Public Health. "This is the first moment of truth for the 2012 health care cost containment law. This is absolutely new ground, and an important moment."