With CEO’s exit, Partners HealthCare faces crucial decisions
In the 25 years since the prestigious Massachusetts General and Brigham and Women’s hospitals came together to form a powerful system, the relationship has been complicated.
While the two hospitals work together on a variety of programs as the founding members of Partners HealthCare, they have maintained much of their independence — at times even competing in medical specialties.
Dr. David Torchiana, as chief executive of Partners, grappled with this complex dynamic while leading an effort to better integrate the hospital system. Now, with Torchiana’s abrupt announcement last week that he soon plans to retire, Partners and its flagship hospitals find themselves at another crossroads as they consider how aggressively to push further integration.
Should executives based in the Prudential tower take a lead on clinical affairs, long the purview of its renowned hospitals? Or should the corporate office limit its role to back-office functions?
While a break-up of Partners seems improbable, and the hospitals say their relationship is stronger than ever, the company’s board and next CEO will face a range of crucial decisions about the partnership’s future.
“The board needs to decide whether their articulated vision of an integrated system is what they want the new leader to pursue, or whether the development of parallel strong institutions which compete with each other is what they want a leader to pursue, because it is that tension that I think has made it such a difficult job,” said James Roosevelt Jr., a health care lawyer and former chief executive of Tufts Health Plan.
Following Torchiana’s announcement, the Globe spoke with about 20 current and former Partners officials and others with knowledge of the organization about its current state and how well it has lived up to its original goals.
To be sure, the two teaching hospitals have accomplished something significant: By joining forces, they have cemented their place in the market and negotiated significantly higher rates from insurers. And Partners, which also owns several community hospitals, has become by far the dominant health care provider in Massachusetts.
Mass. General and the Brigham also work together on certain physician training programs and research projects. And in 2015, Partners began implementing its most expensive system-wide project ever — a $1.2 billion electronic health record program.
But the hospital system generally hasn’t eliminated duplicative services, which Partners executives at the time indicated was a goal of the merger, according to news reports. Company executives now say that wasn’t a primary objective of the partnership.
“It’s highly decentralized,’’ said Nancy Kane, a management professor at the Harvard T.H. Chan School of Public Health. “If it’s decentralized, what can Partners central do? It can only be the lowest hanging fruit.
“It succeeded in what they most wanted, which was integrated purchasing power to get prices up,’’ Kane added.
But almost from the start, the two hospitals made it clear they would pursue their own clinical services, even if it meant establishing programs that may compete.
Around the time of the merger, in 1994, Mass. General opened a gleaming new obstetrics unit while the Brigham — which already delivered the most babies in the state — expanded its large maternity service.
Mass. General considered obstetrics an essential program for a full-service hospital — and one that helps build a loyal patient base. But even for highly specialized services, such as transplants, the hospitals have at times pursued their own programs.
The Brigham added a new pancreas transplant program in 2007, for example, even though the existing program at Mass. General typically performed only a few operations a year.
Mass. General launched Boston’s second hand transplant program in 2011, several months after the Brigham completed two double-hand transplants in its pioneering program. Leaders of the two hospitals said that offering the procedure at both facilities would not drive up costs because the programs would use existing resources.
Several people including former Partners officials described the two hospitals as sometime-rivals, despite being part of the same parent organization.
“The pushback in 1994 is not much different than the pushback in 2019,” said Ellen Zane, a former chief executive of Tufts Medical Center, who also previously served as president of Partners’ physician network. “These places are very successful on their own, and change proves to be difficult.”
The two teaching hospitals have also pursued largely separate growth strategies.
Years ago, Partners and hospital officials agreed that Mass. General would focus north of Boston, while the Brigham would look to the south. That now includes deals with doctors and hospitals outside Massachusetts: Mass. General acquired one New Hampshire hospital and has additional partnerships in that state and Maine, while the Brigham is deeply involved in Partners’ plan to acquire a Rhode Island hospital system.
Also, the hospitals have maintained their own leadership teams and department heads in key areas, from surgical specialties to marketing to research.
Executives at the Brigham, Mass. General, and Partners, though, said the relationship between the two teaching hospitals has never been better, and they responded to Globe questions about their clinical programs with a group e-mail. They said the president of the Brigham, Dr. Elizabeth Nabel, and the president of Mass. General, Dr. Peter Slavin, collaborate well.
Executives acknowledged that Mass. General and the Brigham never fully integrated but said it is not because they are adversaries but because both are full with patients most days — contrary to the dire predictions when they merged that the managed care movement would dramatically shrink the demand for hospital services. Instead, they have focused on clinical integration with Partners’ community hospitals.
Still, they said, Mass. General and the Brigham are collaborating on an increasing number of crucial initiatives. They are implementing a shared radiology technology system that gives providers the ability to immediately access the results of any imaging test performed at any Partners institution.
The two hospital giants also share seven joint residency programs where they train doctors in dermatology, emergency medicine, neurology, obstetrics and gynecology, orthopedics, plastic surgery, and radiation oncology. And, executives said, Partners has about 45 company-wide committees.
“The historical tensions between the Brigham and MGH, two of the world’s greatest clinical operations, is something people have chattered about for a couple decades,” said Scott Sperling, chairman of the Partners board. “But it’s dramatically better over the last four or five years. The number of cooperative programs has increased dramatically.’’
Torchiana, with support from the Partners board, began an effort to think more strategically about Partners as a system, and he assembled task forces to examine Partners’ governance, brand, capital priorities, operating structure, and other areas.
Sperling, in a memo to Partners leaders last year, said the company must move swiftly to be “a more unified system.” But he acknowledged the organization would need to overcome “significant obstacles,’’ including “lack of consensus on the urgency and speed required to address these issues.’’
Now, it’s unclear who will lead the integration effort, which has run into rising tensions from other Partners leaders. Torchiana said he will step down on April 29. The board is planning to search nationally for a new CEO.
“Torch was an incredibly good leader,” said Cathy Minehan, a member of the Partners board. “He had a way of distilling the challenges facing us. He really got us into Partners 2.0 and creating a better system view. We’re all committed to that at the board level.”