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Partners completes takeover of doctors group

The state's largest health system acquired a group of about 70 doctors Wednesday, adding 60,000 patients to its network, despite warnings from the attorney general and health officials that the deal would raise medical costs without benefiting consumers.

But Partners HealthCare promised to limit price increases for its new doctors, who make up the practice Harbor Medical Associates, to the rate of inflation for about five years. Partners operates 10 hospitals, including the prestigious Boston teaching hospitals, Massachusetts General, and Brigham and Women's.

Partners spokesman Rich Copp said the health system alerted the state's largest health insurers — Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Health Care, and Tufts Health Plan — about its plans on Wednesday.

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"It's a response to what we've heard," Copp said. "Out of deference to the Health Policy Commission, and because of the concerns that the attorney general has raised, we've informed the three largest insurers that we will not request rate increases for Harbor beyond inflation."

The Health Policy Commission, a state watchdog agency, said Wednesday that the Harbor deal could add $8 million to medical spending if the Harbor doctors were to be paid at the same rates as Partners doctors. Commissioners also warned of added costs if the Harbor doctors shift referrals to send more patients to higher-cost hospitals owned by Partners.

"Partners is proposing steps to address some of our concerns, and the HPC will continue to assess and monitor their commitments," Stuart Altman, chairman of the commission, said in a statement.

Attorney General Maura Healey this week urged Partners to drop the Harbor deal, also citing concerns about costs. Healey acknowledged she had no legal grounds to stop the transaction but called on Partners to curb costs before getting bigger.

"We had hoped that Partners would not move forward with this acquisition, but it appears that this is a step toward addressing some of the cost concerns we had about the transaction," said Healey's spokeswoman, Cyndi Roy Gonzalez.

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At the beginning of 2016, the Harbor doctors will join the group of about 1,500 physicians at Brigham and Women's Hospital. Officials at Partners and Harbor said the deal will improve the coordination of patient care and eventually lower costs.

"This integration will ultimately reduce health care costs by providing South Shore patients with a thoughtful, coordinated approach to their health care," said Dr. Jessica C. Dudley, chief medical officer of the Brigham and Women's Physician Organization.

Dudley, in her statement, said referral patterns would not change; doctors will continue to send many patients to lower-cost South Shore Hospital in Weymouth.

The Brigham and South Shore Hospital have a strong affiliation going back more than a decade. Partners spent three years trying to acquire the Weymouth hospital, but facing a backlash over its market power and high costs, Partners last month abandoned that plan.

Partners is still considering whether to move forward with plans to acquire hospitals in Medford and Melrose, which make up Hallmark Health System. A judge in January rejected a settlement that would have allowed the Hallmark and South Shore acquisitions. Partners can try to close the Hallmark deal, but faces a potential challenge from the attorney general.


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