Agreement Allows But Limits Partners Growth, Caps Prices To 2020

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This just in from the Associated Press:

BOSTON - Attorney General Martha Coakley has reached an agreement with Partners HealthCare, the largest hospital and physicians' network in Massachusetts, that will allow it to acquire South Shore Hospital and Hallmark Health Systems.
Coakley says the deal will also fundamentally alter the negotiating power of Partners for the next decade and help control health care costs.
Monday's agreement must be finalized by the parties by June 16 and approved by a court before taking effect.
The deal includes capping health costs at the rate of inflation across the entire Partners network through 2020.

And this from the Health Policy Commission

Attorney General Martha Coakley’s Agreement in Principle with Partners HealthCare

Statement of Dr. Stuart H. Altman, Chair, Massachusetts Health Policy Commission:

“I am pleased the comprehensive settlement described by the Attorney General addresses concerns raised in our recent cost and market impact review report. Our objective, data-driven review, referred to the AG in February, found that the acquisition of South Shore Hospital by Partners HealthCare System will increase health care spending, likely reduce market competition, and result in increased premiums for employers and consumers. I look forward to reviewing a final agreement, but I believe the AG and the parties have taken our work into account in developing the conditions under which this transaction can move forward. The HPC will continue to assess the impact of provider market changes and work with the AG to foster a more competitive health system for the benefit of Massachusetts consumers and businesses.”

A message from Partners Healthcare chief Dr. Gary Gottlieb lays out some details:


· Finally, like all the communities we serve, we made a commitment to SSH, HHS and HMA to work with them to bring the best care possible to their patients and their families.

We want to share with you the details of the agreement:

· We will give commercial insurance companies the option to separately contract for our teaching hospitals (BWH, MGH, McLean, Spaulding) as one group, and for community hospitals as another, for 10 years. SSH and HHS may remain separate components for seven years and then will become part of the community hospital group;

· We will no longer negotiate commercial insurance contracts on behalf of physicians who are not employed/leased by us unless they are members of our own PHOs;

· We will guarantee that our contracts with commercial insurers will increase at a rate no higher than general inflation for a period of 6 1/2 years and our increase in total medical expense (TME) for our HMO contracts will not be greater than the growth cap set by the Health Policy Commission;

· This price growth guarantee (referenced above) will also collectively apply to South Shore Hospital, its PHO and Harbor Medical Associates;

· We can restore our community physician network to the size it was in 2012, adding up to 550 doctors (outside of metro Boston) and include an additional 40 doctors in year 4 and 5 of the agreement;

· We will not acquire any hospital in eastern Massachusetts (including Worcester County) for 7 years without prior approval from the Attorney General. There is an exception for Emerson Hospital and its PHO, current Partners affiliates, in this agreement.

The challenges we will face with these conditions are not new to our organization. We will need to find more savings and efficiencies; we have done a lot of good work already taking out more than $300 million in costs out of our system. It has been clear that going forward we will need to operate within a tighter budget envelope. Society and the marketplace are calling on us to do so. This means that there will be trade-offs and decisions to make and we will need to manage them, carefully and thoughtfully.

With the depth and breadth of our talented teams, more than 60,000 of us standing together as one, we can provide the leadership to define a direction for the future that will benefit the communities we serve in the most effective way. We are in a time of change, and your dedication in support of our mission will help guide our pathway going forward. We will build on our vision to continue to deliver the highest quality care that is affordable and accessible and nurtures the needs of our patients and their families whenever they call on us.

Thank you,

Gary Gottlieb, M.D.

Partners President and CEO

Readers, thoughts? Please stay tuned for reporting from WBUR's Martha Bebinger.

Carey Goldberg Twitter Editor, CommonHealth
Carey Goldberg is the editor of WBUR's CommonHealth section.




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