Breaking: Talks Under Way For Neighborhood Health Plan To Join Partners HealthCare

WBUR's Martha Bebinger reports:
Partners HealthCare, the state’s largest hospital network, plans to acquire a small Boston- based health insurer. Partners and Neighborhood Health Plan, a nonprofit with 240,000 mostly low and moderate income residents in government health insurance plans, have signed a letter of intent to affiliate. In Massachusetts, networks that own both hospitals and a health insurance company are unusual. And since the deal gives Partners an insurance company, regulators may raise questions about increased market clout. But CEO Gary Gottlieb says Partners does not plan to compete with other major health insurers.

"The focus here is on low income populations so doing better by those populations would seem to be both moral as well as in everybody’s interests and not related to any market issues," Gottlieb said.

Gottlieb says he hopes an affiliation with NHP would help reduce health care disparities in the Boston area.

Partners is expected to increase investments in NHP and related community health centers, although it won’t say by how much.

Neighborhood Health began searching for an affiliation more than a year ago. Director Deborah Enos says NHP’s finances are strong now but the insurer needs to prepare for future financial pressures. Enos says NHP will not limit members to Partners’ hospitals if the deal is approved.

Partners and Neighborhood Health Plan aim to complete their due diligence process and have an agreement by the end of October. The next step is the regulatory review. While there are concerns about Partners entering the insurance market, there is also a push for hospitals to create more comprehensive health networks.

This letter just out from Partners HealthCare chief Gary Gottlieb:

Dear colleagues,

In today's health care environment, as we know, there is an expectation that hospitals, doctors, insurance companies and other interested parties will work together to create opportunities to ensure the delivery of high quality care, improve the coordination of care, deliver value in health care benefits and in doing so will help to bend the cost curve. With that backdrop, I am writing to share the news that we are engaged in discussions with Neighborhood Health Plan (NHP), a not-for-profit Managed Care Organization, about an opportunity to form a new relationship that could yield significant benefit for our patients. Over the past few months, NHP has been seeking a strategic partner to ensure that it is in the strongest position to further its mission, provide enhanced resources to community health centers and historically underserved communities and continue on a path of sustained growth.

There are several reasons why our organizations would fit together well. Partners HealthCare and NHP share a deep commitment to provide the highest quality, highest value, culturally competent and compassionate care that is accessible to patients and their families. We are both deeply committed to Community Health Centers (CHCs) and the belief that CHCs are a cornerstone of a cost-effective health care delivery system, particularly for the underserved. Both organizations also have a long-standing history of collaboration and are strongly committed to serving the health care needs of low income and vulnerable populations in Massachusetts. The bulk of NHP's members receive their coverage through state programs, especially Medicaid (MassHealth) and Commonwealth Care.

We both believe that combining the experience and expertise of our organizations will result in a stronger patient experience and address growing needs for care coordination and management, health equity, and the ability to help curb health care costs. Working together, our organizations will have the flexibility to develop innovative patient and family centered models of care and craft new initiatives aimed at better managing care of complex conditions.

To be clear, this is not a purchase, but rather an affiliation by which NHP becomes a member of Partners HealthCare. This is a process that will take months and will require regulatory approval. We will keep you posted on developments as we move forward.

Thank you.

Gary L. Gottlieb, M.D.
President and CEO

Here's a fact-sheet put out by the two parties in this new relationship:

Who
Neighborhood Heath Plan (NHP) is a licensed not-for-profit Managed Care Organization founded in 1986 by the Massachusetts League of Community Health Centers and the Greater Boston Forum for Health Action. NHP is a trusted source of affordable comprehensive care for diverse communities, from individuals to government and local businesses across Massachusetts. It serves more than 240,000 members and employs over 400 full- and part-time staff. NHP is the only safety-net insurer servicing MassHealth, Commonwealth Care, and commercial populations.

Partners HealthCare is an integrated health system founded by Brigham and Women’s Hospital and Massachusetts General Hospital.  In addition to its two academic medical centers, the Partners system includes community and specialty hospitals, community health centers, a physician network, home health and long-term care services, and other health-related entities.  Partners cares for about 1.7 million patients a year and employs more than 60,000 people.

What
Neighborhood Health Plan has actively sought a strategic partner to ensure that it is in the strongest position to further its mission, provide enhanced resources for community health centers and the underserved, and to continue on a path of sustained growth. NHP and Partners have signed a Letter of Intent (LOI) that would bring the two non-for-profit organizations together whereby Neighborhood Health Plan would become part of Partners HealthCare. NHP would continue to exist as a legal entity.

When
Now that a Letter of Intent has been signed, the two organizations will enter a process of Due Diligence. Upon completion of that process there will be a regulatory approval process, which will include the Division of Insurance and the EOHHS as well as federal and state anti-trust reviews.

Why
In today’s health care environment there is an expectation that providers, hospitals, health insurers, and others are developing new relationships that will help to bend the health care cost curve, ensure the delivery of high quality care, improve the coordination of care and deliver value in health care benefits. Working together, these organizations will have the ability and flexibility to develop innovative patient and family centered models of care and craft new initiatives aimed at better managing care of complex conditions. Both NHP and Partners believe that combining the experience and expertise of both organizations will result in a stronger patient experience and address growing needs for care coordination and management, health equity, and the ability to help curb health care costs.

How
As part of the Letter of Intent, NHP would affiliate with Partners to become a member of Partners HealthCare system, operating as a separate legal entity. At the completion of the agreement, Partners would make a significant commitment to fund a grant program to improve the infrastructure and expand programs for community health centers.

And here's the letter that Neighborhood Health Plan chief Deb Enos sent to all employees today:

NHP All Staff Email – Scheduled for distribution at 2:30pm on 08-10-11 FINAL

Good Afternoon Everyone,

For those of you who were unable to make today’s company meeting, I want to be the first to let you know that the Neighborhood Health Plan Board of Directors, in alignment with me and our senior leadership team, has made the decision to sign a Letter of Intent with Partners HealthCare, whereby NHP would become part of Partners HealthCare. NHP will continue to exist as a legal entity.

I’m personally very excited about this new relationship and would like to give you some background on how we came to this decision. NHP has been engaged in seeking a strategic partner to further the strength and reach of our mission, to provide enhanced resources for community health centers and historically underserved communities, and to continue on our path of sustained growth.  Critical to this endeavor was to choose a strategic partner in keeping with NHP’s roots, mission, and future outlook.

The missions of NHP and Partners are very compatible.  Our organizations and employees share a deep commitment to providing the highest quality, highest value, culturally competent and compassionate care that is accessible to patients and their families. We are both deeply committed to Community Health Centers and the belief that CHCs are a cornerstone of a cost-effective health care delivery system, particularly for the underserved. We also share a long-standing history of collaboration in serving the health care needs of low income and vulnerable populations in Massachusetts.

In today’s health care environment, providers, hospitals, health insurers, and others are developing new relationships to help drive the delivery of high quality care and care coordination in a more cost-effective manner. As a leader both locally and nationally, NHP is no exception to this. And as a leading safety net managed care organization, we are in a strong position to pursue opportunities to ensure our goal of securing a positive future for our organization and the people we serve.

You may soon see news of this in the media. I want to emphasize that from here many steps must be taken in a process such as this to get to a positive and desired outcome in ensuring we attain our goal.
I also want to urge each of you to continue to do the great job that you are doing. It is because of your dedication and excellence that NHP has been able to enter into these discussions and why Partners is excited to form this new relationship with us as well.

There will be more to come in the near future, so stay tuned.

Deb