THE DAYS of expansion for Partners HealthCare are over.
Partners needs a new business plan, one that emphasizes its core mission to provide great medical care, instead of market dominance through mergers with other hospitals. And provable cost control is essential for what is now the most expensive health care network in Massachusetts. The future must be focused on better, not bigger.
That’s the message sent by Massachusetts Superior Court Judge Janet L. Sanders when she rejected Partners’ plan to acquire three community hospitals and add hundreds of doctors to its network. If Partners tries to move forward anyway, Attorney General Maura Healey said she will file an antitrust lawsuit.
What Partners does next will signal whether it got the message. From its public pronouncements, it’s hard to tell.
“This has not been about expansion,” said Peter Brown, chief of staff for Partners HealthCare and spokesman for outgoing CEO Gary L. Gottlieb — a statement that is hard to square with Partners’ stubborn push to acquire three more hospitals. “Our mission is to provide the best patient-centered care to all of our patients. Our objective is to use the tools of a new reimbursement environment to provide highest quality care closest to people’s homes in lower-cost settings.”
The first test of Partners’ strategy is who is chosen as the next CEO. David Torchiana, a physician and chairman and CEO of the Massachusetts General Physicians Organization, is believed to be the top contender for the position. Can someone who has never led a company in need of a turnaround take one on? Because that’s what’s needed at Partners.
The hospital brand retains its luster. No one doubts the commitment to great medical care and research. But the corporate brand is another story.
In the push to acquire South Shore Hospital and two others north of Boston, Partners’ current leadership came across as arrogant, tone-deaf, and unprepared to counter critics of the deal. Rival hospitals joined together to oppose it, and health care experts challenged the alleged cost savings and enforceability. A little-known judge had the temerity to question its basic premise rather than rubber stamp it. Then, a new AG, barely one week into her term, said she would go to court, if necessary, to block it.
With that, a health care network long considered unstoppable when it came to getting what it wanted was thrown into limbo. Now what? In the aftermath, how will Partners be different? What are the lessons learned? Has the health care landscape changed so much that the original goal of Partners has to be redefined?
In 1994, the merger of two great hospitals — Massachusetts General and Brigham and Women’s — was hailed as a way “to create a virtual alliance . . . to market efficiently, save costs and advance research,” wrote John Alfred Kastor, in “Mergers of Teaching Hospitals in Boston, New York and Northern California.” Two decades later, the Partners network includes more than 6,000 doctors, 10 hospitals, and several other health facilities. But while the marketing and medical research parts of the promise were fulfilled, the cost savings never were.
Partners never merged hospital assets; instead, between the Brigham and the General, it created two giant, co-existing hospital systems which still compete with each other. A much-cited New York Times editorial, written when critics of the deal first came forward, suggested the state should never have signed onto the merger that created Partners in the first place. Today, knowledgeable observers believe neither hospital would be sad to cut the ties that bind them. Indeed, especially within Mass. General, there was extensive internal opposition to the merger deal with South Shore Hospital and the spending caps that were part of it.
Unraveling Partners seems unlikely. That means the next leader will have to figure out a way to get these two institutions on the same page when it comes to corporate mission. Better, not bigger, was the mantra of Gottlieb’s predecessor, Dr. James Mongan. When Mongan died, the headline over his obituary also described him as “a doctor with political skills.” In a practical sense, that translated into an ability to keep the “care” part of health care front and center during the debate over cost and service delivery.
At Partners, that skill is sorely needed as the debate over cost grows more acrimonious.