Partners HealthCare Looks To Grow, Again

Partners CEO Dr. Gary Gottlieb

Partners CEO Dr. Gary Gottlieb

Partners HealthCare, already the state’s largest hospital network, wants to get bigger.

Partners has confirmed plans to bring two community hospitals owned by Hallmark Health into its network. If the proposal is approved, there would be changes at four hospitals on the North Shore.

Partners wants to acquire Hallmark Health’s Melrose-Wakefield Hospital in Melrose and Lawrence Memorial in Medford. If approved, Partners would renovate Melrose-Wakefield and expand primary care there, adding 25 doctors. Lawrence Memorial would still offer urgent care, but would shift to short-term hospital stays and day procedures, such as colonoscopies and arthroscopies. Lawrence Memorial would shut down about half of its overnight beds.

Partners CEO Gary Gottlieb says the network would move many day procedures out of Massachusetts General Hospital, where they are more expensive, to Lawrence Memorial.

“Moving care from MGH to community sites will create savings,” Gottlieb said. “We expect that in the first five years of this we’ll save about $300 million to the marketplace.”

Two hospitals Partners already owns on the North Shore would also be reorganized as part of this package. North Shore Medical Center’s Union Hospital in Lynn would become a behavioral health center for overnight and day treatment and its surgery and other medical care would move to the other North Shore Medical facility in Salem.

Gottlieb says all these changes would mean better care options for North Shore residents. But some of the regulators who will review the plan are not sure.

Said Dr. Paul Hattis, of the state’s Health Policy Commission: “With a system such as Partners that’s been able to extract a lot of money from private payers for its services over the years, it’s fair to ask: What sort of checks and balances need to be in place to ensure that any net benefits exceed any net burdens of any additional proposed acquisitions?”

The commission has already raised concerns about another proposed Partners acquisition.

The commission is worried that Partners’ plan to bring South Shore Hospital into its network would increase prices. Partners and other growing networks argue that health care systems have to be big these days to manage costs and cover the needs of all their patients.

The question is: How big is too big?

“Big per se is not necessarily the problem if they can show efficiencies that bring prices down,” said state Attorney General Martha Coakley, who will also review the proposed Partners/Hallmark deal. “The real issue that we’ve focused on is: Does bigness mean marketing clout? Does bigness mean that you can contract in a way that distorts or continues to distort the market?

In response, Gottlieb says Partners will be held accountable by a new state law that scrutinizes health care prices and by health plans that encourage patients to choose low-cost providers.

“And at the same time,” he said, “just remember it allows us to create some stability in community hospitals that will be very, very frail — not just needing investment, but that will be challenged to survive in this environment.”

Keeping community hospitals open and stable, Gottlieb adds, will preserves jobs.

The review of this complex deal will extend into next year.

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  • Vicki Moran

    I am glad to hear the state’s Health Policy Commission raise the point about how the growth of these mammoth networks gives the huge hospital chains incredible power to demand higher reimbursements, one of the unaddressed factors which helps to drive the disproportionate increase in health care costs in the US. Back in the days when for-profit health care was just beginning, the argument for such consolidations was that it would allow more efficient use of existing facilities and produce savings. Many of these “savings” now end up in the pockets of investors. Partners may technically be “not for profit”, but there are many ways to label and use the money they rake in (big beautiful buildings, for instance) besides ploughing it into patient care. The Affordable Care Act, and what the previous commentor has labeled “Romneycare”, present a challenge to Partners, and other similar institutions, who seek to become and remain the 800 pound gorilla in town, because it gives them more leverage in the health care market. Since our nation no longer seems to enforce its antitrust laws, we need some other sort of mechanism to try to slow the growth of health care expenses. The “market” is not so “free” as we would hope, and has until now shown little impetus to reign itself in.

  • fun bobby

    these guys are making money hand over fist, thanks romneycare!