Levy: Why Is Partners Acquiring Neighborhood Health Plan?

A day after Partners HealthCare announced it would take over Neighborhood Health Plan, the Boston-based nonprofit with 240,000 mostly low-income patients in government-subsized insurance plans, health policy insiders are abuzz with one question: Why?

Here's a theory from Paul Levy, former CEO of Beth Isreal Deaconess Medical Center, posted on his blog:

I am speculating, of course, but there are two ways to look at this. One is that PHS is trying to lock in a set of relationships and customers for the future; but that doesn't make sense because these patients are poorly reimbursed. Also, the company has promised that it will not use this new relationship to limit those patients' choice of providers. So to make that work, it would have to develop new models of care that enable this group of patients to be profitable, notwithstanding Medicaid rates that are acknowledged to be too low. A worthy, but very hard row to hoe when you operate a high fixed cost network.

The other is that a trade has taken place, related to the fact that the holding company has been facing state and federal antitrust reviews. It agrees to provide some financial assurance to a financially stressed insurance company and community health centers serving mainly the indigent, in return for being allowed to keep other human resource or geographic assets that might otherwise be subject to a divestiture that would have reduced its market power.

Or maybe they just want to make sure care is accessible to everyone.

Any other theories out there? All are welcome.

This program aired on August 11, 2011. The audio for this program is not available.

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Rachel Zimmerman Reporter
Rachel Zimmerman previously reported on health and the intersection of health and business for WBUR. She is working on a memoir about rebuilding her family after her husband’s suicide. 



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