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Torchiana Is Partners HealthCare’s New CEO

Dr. David Torchiana, a cardiac surgeon known simply as “Torch” among colleagues at Massachusetts General Hospital (MGH), will be the next CEO of Partners HealthCare.

He will take charge of the state’s largest employer next month. The current CEO, Dr. Gary Gottlieb, will move to his new role as CEO at Partners In Health a bit earlier than expected.

Torchiana assumes control of Partners at a particularly turbulent time. Last week, a judge rejected an agreement that would have let Partners expand, adding at least three more hospitals, in exchange for limits on the number of employed physicians and the prices it could charge.

Dr. David Torchiana (Partners HealthCare)

Dr. David Torchiana (Partners HealthCare)

Partners had been working to acquire South Shore Hospital since 2012 and announced a bid for two hospitals owned by Hallmark Health in late 2013.

There is no word yet on whether Torchiana and the Partners board plan to revive those acquisition plans. Attorney General Maura Healey has said she would sue to block the addition of South Shore to the Partners network, but she has not made the same threat regarding Hallmark.

“Dr. Torchiana possesses the instincts and the political savvy to be an outstanding leader for Partners,” said Edward Lawrence, chairman of the Partners board, in a statement late Wednesday, after members approved Torchiana in a unanimous vote. Lawrence added that the new CEO will “be a leader who provides stability and lends a voice of assurance that Partners HealthCare wants to help address the challenges and be part of the solution.”

“We want to be constructive participants in the ongoing public conversation about the future of health care including quality, cost and access,” Torchiana said in the statement from Partners.

Insiders at Partners said the decision about who would replace Gottlieb came down to Torchiana, who runs the more-than-2,000-member physicians group at Mass General, and the hospital’s president, Dr. Peter Slavin. Some suggested Slavin was reluctant to leave the helm of the prestigious hospital. Dr. Betsy Nabel, the president at Brigham and Women’s Hospital, was thought be in the running early on, but it wasn’t the Brigham’s turn. The job of running Partners has shifted from the Brigham to MGH with each successive CEO since the two hospitals formed the Partners network in 1994.

Torchiana graduated from Harvard Medical School in 1981. He completed residencies at MGH and joined the department of surgery in 1989.

Another Historic Health Care Move In Boston: Saying No To Biggest Hospital System

Massachusetts General Hospital , one of the hospitals in the Partners Healthcare system. (Wikimedia Commons, 2006)

Massachusetts General Hospital, one of the hospitals in the Partners HealthCare system (Wikimedia Commons, 2006)

Even if you don’t follow sports, you surely know about the Super Bowl. And even if you don’t follow the health care business, you may want to note a judge’s bombshell decision that has just hit the sector in Massachusetts. It may affect your hospital bill someday.

The news: A superior court judge has rejected a deal that would have let the state’s biggest hospital system — Partners HealthCare, which includes academic giants like Massachusetts General Hospital and Brigham and Women’s Hospital — expand.

Partners had been seeking to acquire at least three more hospitals, and had agreed to price caps and other limits that would hold for six-and-a-half to 10 years. But Suffolk Superior Court Judge Janet Sanders concluded that letting Partners expand would not be in the public interest; it “would cement Partners’ already strong position in the health care market and give it the ability, because of this market muscle, to exact higher prices.”

If you get too big, as Partners has become, it sort of destroys the concept of a competitive marketplace.

– Health Policy Commission Chair Stuart Altman

To sum up the last decade of Massachusetts health care history in one paragraph: First, the state passed groundbreaking health care reform that presaged Obamacare. But though that reform meant that virtually everyone had health insurance, it didn’t “crack the code” of health care costs, which kept rising. The state created a Health Policy Commission, which was meant to keep an eye on costs among other things. When Partners, which the Boston Globe reports already has $11 billion in revenue, sought to expand, the commission concluded that the expansion would increase health care spending in the state by $39 million to $49 million a year. Partners opponents pushed back, and now the judge has sided with them.

Dominant hospital systems exist in areas around the country; the New York Times has written repeatedly about their tendency to lead to higher costs for patients, including here — 2 Hospital Networks Agree To Merge, Raising Specter of Costlier Care — and here: The Risks of Hospital Mergers. The main risk: The market power of big hospital systems means they can negotiate for higher prices from insurers, prices that tend to be passed down to consumers.

It remains to be seen whether this is an important new national precedent. But we cannot help but note that Massachusetts has certainly set important health care precedents in the past. WBUR’s Martha Bebinger offers a rich, full report of the judge’s landmark decision here, including this memorable quote from Stuart Altman, chair of the Health Policy Commission:

“If we’re going to have the cost of health care grow at a more normal rate, we need to have enough competition in the marketplace so that no part of the system can dictate prices,” said Stuart Altman, chair of the Health Policy Commission. “If you get too big, as Partners has become, it sort of destroys the concept of a competitive marketplace.”

Judge Sanders also wrote in her opinion that the deal would be too difficult to enforce, and offered some examples, Martha Bebinger reports: Continue reading

Judge Rejects Partners Deal To Acquire 3 Hospitals

Updated 6:30 a.m.

BOSTON — The state health care market is reverberating with the aftershocks of a major court decision Thursday which rejected a deal that would have let Partners HealthCare, the state’s largest hospital network, acquire at least three more hospitals.

Suffolk Superior Court Judge Janet Sanders gave two reasons for rejecting the deal former Attorney General Martha Coakley’s top staff spent months thrashing out with Partners. First, she says, it is not in the public interest.

Allowing the network to expand “would cement Partners’ already strong position in the health care market and give it the ability, because of this market muscle, to exact higher prices,” Sanders said.

For proof, she cited the work of the state’s Health Policy Commission. It concluded, in separate studies, that adding both South Shore Hospital and two Hallmark Health hospitals to the Partners system would increase health care spending by $39 million to $49 million a year in Massachusetts.

“If we’re going to have the cost of health care grow at a more normal rate, we need to have enough competition in the marketplace so that no part of the system can dictate prices,” said Stuart Altman, chair of the Health Policy Commission. “If you get too big, as Partners has become, it sort of destroys the concept of a competitive marketplace.”

Sanders’ second reason for blocking the deal: it would just be too difficult to enforce. Her opinion offered a few examples.

Continue reading

Related:

AG Healey Weighs In Against Partners Acquisition Of South Shore Hospital

Attorney General Maura Healey, at WBUR (Robin Lubbock/WBUR)

Attorney General Maura Healey, at WBUR (Robin Lubbock/WBUR)

Updated 7:15 p.m.

BOSTON — On her first Monday morning as Massachusetts attorney general, Maura Healey stepped into a fight that may well continue through her first term. Healey said, in short, that Partners HealthCare should not be allowed to acquire South Shore Hospital and that she would sue to block the acquisition.

Her predecessor, Martha Coakley, had the option of suing Partners, but chose instead to negotiate concessions. In a deal filed in court by Coakley, Partners would be able to add at least three more hospitals — South Shore and two owned by Hallmark Health — but would have to keep price increases in line with inflation for six and half years and cap the size of its physician group for five years.

Healey raised several concerns about the agreement in a brief filed in court Monday. She suggests that the physician cap is too lax and that the terms of the deal are too short. When the deal expires, “Partners may wield market leverage that is greater than its current, already significant market leverage,” Healey said.

Healey said she wants proof that Partners has figured out how to use its size to save money.

Continue reading

Welcome, Attorney General Healey. What Are You Going To Do About Partners?

It’s swearing in day for Maura Healey, Attorney General. (Steven Senne/AP)

It’s swearing in day for Maura Healey, Attorney General. (Steven Senne/AP)

Maura Healey will inherit several thorny issues Wednesday as she becomes the next state attorney general. Near the top of her list: the agreement that would let Partners HealthCare acquire at least three more hospitals in exchange for some limits on price and staff increases.

During the campaign, Healey raised questions about whether the deal was enough, both in scope and in duration.

So now that she’s in charge, will she urge Judge Janet Sanders to approve the agreement, suggest changes, or start over? In an interview before her swearing-in, WBUR’s Bob Oakes put these questions to Healey. Here’s the sum total of her response:

This is a matter that I’m reviewing and being briefed on now. The perspective I come from, as attorney general, is to drive down health care costs. So I’m considering my options. Right now, the matter is before the court, as you say. There was a proposed consent judgement filed, and we’ll just have to see on that.

In short, stay tuned.

Sanders suggested back in November, at the last hearing on the Partners deal, that she’d like to speak to Healey before issuing a ruling. She may also be waiting for Partners to name a new CEO, a decision some sources expect in the next four or five weeks. Sanders could call the parties in for a status conference at any time. Healey and Partners have that option as well.

Who will make the next move? Any bets?

You can hear all of Bob’s conversation with the new AG here.

Related:

Judge Appears Skeptical About Partners HealthCare Deal

Outgoing Massachusetts Attorney General Martha Coakley, a key player in the Partners deal. (Steven Senne/AP/File)

Outgoing Massachusetts Attorney General Martha Coakley, a key player in the Partners deal. (Steven Senne/AP/File)

In a packed courtroom on the 10th floor of Suffolk Superior Courthouse, the question on the docket appeared to be a simple matter: Should a judge in the Business Litigation Division say yes or no to a deal negotiated between Partners HealthCare and Attorney General Martha Coakley?

In any standard consent judgment, the judge would default to the attorney general.

But again Monday, as she did in September, Judge Janet Sanders made clear she will not say yes, no, or come back with a revised deal until she understands the details and possible consequences. Sanders wants to determine if consumers and the state would benefit from Partners’ proposed expansion.

She asked dozens of questions that suggest she is skeptical. And at the end of the day, she and Coakley engaged in what came across as a politely combative exchange. More on that later.

For an example of Sanders’ questions, let’s take the price caps. Under the agreement, payments to Partners could not increase more than inflation for six-and-a-half years.

Would Partners still have the highest-paid hospitals in the state? Sanders asked.

Yes, probably, said the AG’s office, except for Boston Children’s Hospital. This agreement doesn’t claim to correct historical problems, said Will Matlack, chief of the AG’s anti-trust division.

What happens, Sanders continued, if Partners jacks up prices in year seven? By then, Partners will be even bigger, and could demand more money than they can now, she suggested.

That’s speculation, said the AG’s office. And it’s not reasonable speculation, said an attorney for Partners, because there are lots of dynamics that could change the market between now and then. Continue reading

Gottlieb Leaving Partners HealthCare For Partners In Health

Partners CEO Dr. Gary Gottlieb

Partners CEO Dr. Gary Gottlieb

The CEO at Partners HealthCare, the state’s largest private employer, plans to step down.

Dr. Gary Gottlieb agreed Friday to become the CEO at Partners in Health, a global health organization whose latest project is an Ebola response effort in West Africa.

Gottlieb is scheduled to make the transition on July 1, 2015. His decision comes amid acourt review of Partners’ controversial expansion plans and questions about Gottlieb’s ability to manage political dynamics outside the hospital network.

His supporters point out that Gottlieb has just begun his second five-year contract, and they say Partners board members urged Gottlieb to stay. But some current and former Partners leaders say dissatisfaction with Gottlieb’s leadership has been building for months and that the Partners in Health job offers Gottlieb a graceful way out.

He will take a dramatic pay cut, from more than $2 million a year to $200,000 a year at Partners in Health.

Gottlieb serves on the board at Partners in Health, has visited the group’s projects in Haiti and Rwanda, and calls it the most important global health initiative in the world.

“This is a singular opportunity to lead that organization at a time when it is clear that improving sustainable health care throughout the world is critical to all of us,” Gottlieb said.

Gottlieb says he began thinking seriously about moving to Partners in Health this summer, and decided to make the change earlier in the fall after hearing Partners in Health co-founder Paul Farmer describe what was happening in West Africa.

“With Ebola, maternal deaths had increased because there was no place for people to deliver babies,” said Gottlieb. “Malaria deaths had increased because there was no way to provide the appropriate care for what is a more ordinary terrible disease. The notion that building sustainable health care was essential for real social justice and real change had become even more obvious.” Continue reading

Just A Status Conference On Partners Deal, But Health Care History

Massachusetts Attorney General Martha Coakley (Steven Senne/AP/File)

Massachusetts Attorney General Martha Coakley, a key player in the Partners deal and also a candidate for governor. (Steven Senne/AP/File)

Health care history unfolds in Suffolk Superior Court today. It may just be a status conference, but it could still be a heck of a show because…

1) The hearing is about a deal that many experts say will shape health care in Massachusetts for a decade or longer. It would limit, but not stop, the expansion of Partners HealthCare, already the largest hospital/physician network in the state.

2) There are some dramatic characters.

• Attorney General Martha Coakley, who’s running for governor, and taking a lot of heat for allegedly letting Partners off too easily. Coakley has repeatedly said she won many more concessions from Partners by negotiating than she would have by suing to try and stop Partners’ expansion. Her court filing is here.

• Some of the city’s top attorneys, representing Partners, the two hospitals it wants to acquire and dozens of supporters and opponents of the deal.

• Judge Janet Sanders, who has not, as far as I can tell, ever worked in health care, signaled that she may need expert help reviewing the voluminous materials filed about this agreement. And while Partners, South Shore Hospital and Hallmark Health are anxious to move ahead with their mergers, Sanders said on Friday that “the issues raised are too important to be dealt with hastily.”

Alerts about protests outside the courthouse went out last week.

But there’s another reason that health care industry watchers toss around words like “historic” or “milestone” in conversations about today’s hearing and the proceedings before Judge Sanders. This level of scrutiny — of one hospital system merging with another — is just very, very unusual in Massachusetts or elsewhere. It’s all triggered by the 2012 law that focuses on controlling health care costs. We are watching the sausage get made. It isn’t pretty or easy to decipher, but it is more open than anything I think we’ve seen before.

Democratic AG Candidates Question Whether Partners Deal Will Cut Costs

Veronica Thomas
CommonHealth Intern

The two Democratic candidates for Massachusetts attorney general are united in their skepticism: They question whether the deal forged by current AG Martha Coakley with Partners HealthCare will succeed in containing costs.

On Tuesday, The Boston Globe hosted a debate between candidates Maura Healey and Warren Tolman, who will go head-to-head for the Democratic nomination in two weeks. While the candidates diverged on a majority of issues, ranging from sexual assault to smart gun technology, they concurred (at minute 34-36 in the YouTube video above) that the controversial Coakley-Partners deal aimed at regulating the expansion of Partners, the state’s largest hospital network, may fall short.

Boston Globe columnist Joan Vennochi asked whether the proposed Coakley-Partners deal has “enough teeth for effective enforcement.” Here are the candidates’ responses:

Maura Healey, former Assistant Attorney General: There are aspects of this deal, Joan, that I am skeptical about. I actually had left the office at the time this agreement was done. But it’s true, Joan, I was in the office. I oversaw, as Public Protection Bureau Chief, the teams that prepared the reports on transparency, and trying to point to what was driving up costs. And I oversaw teams that began this investigation that resulted in this proposed agreement. What I’ve seen, what I’ve read, gives me pause.

I mean, we all know we’ve done a great job here as a state in terms of increasing accessibility to care, increasing quality of care, but costs are key. And as AG, you need to do everything you can to put a downward pressure on costs, and so I have some skepticism about the proposed agreement.

Warren Tolman, former State Senator: So the big issue here, from my perspective, is the ability of this agreement to control costs or not.

My mom spent the last five and half years of her life in a wheelchair, in and out of a nursing home, and in and out of hospitals. And I watched as my dad — my mom and dad had raised eight kids and they grappled with these ever-increasing costs that are associated with Partners and with other healthcare entities.

So I’m very, very concerned about the impact of the ever-increasing healthcare costs and whether this agreement really does what it’s intended to do in terms of curtailing those costs. That’s the number one concern. Continue reading

In Public Comments, Partners-Coakley Deal Brings Praise And Protest

partners

Quite an “only in Massachusetts” moment.

Patriots owner Robert Kraft and leaders of Raytheon, Suffolk Construction and Putnam Investments have all filed letters in support of an anti-trust agreement that would not normally see the light of day before a judge approves the deal. The opposition includes public health professors, a group of top economists and politicians battling Attorney General Martha Coakley in the governor’s race.

This show of force is weighing in on a deal Coakley negotiated with Partners HealthCare. It would let the state’s largest hospital network expand its market power, but with constraints, some of which would last for 10 years.

Here, in the medical mecca that is Boston, health care is big business, an issue in the governor’s race and a top concern for consumers and employers who struggle to pay for it.

So the agreement is setting a new precedent for public scrutiny. Insurers, physicians and patients are poring through the document, line by line, to understand what it might mean for them and the future of health care in Massachusetts. AG Coakley is collecting public comments through September 15th. She’ll have a week to respond and then Suffolk Superior Court Judge Janet Sanders has scheduled a hearing on the agreement September 29th.

In the first batch of comments out today, most of the supporters focus on Partners’ leadership in the medical community and don’t dive into the details of its alleged anti-trust practices and the proposed remedies. Opponents, on the other hand, plunge right in. Here are a some highlights:

The South Shore Hospital community has submitted at least a dozen letters in support of the agreement, which would clear the way for the hospital to join Partners. Weymouth Mayor Susan Kay applauds the AG’s “significant and even historic benefits for the acute care market place.” And Norfolk County Central Labor Council Secretary James Howard says “enough is enough.”  Please, Howard urges Coakley, “stop letting self interested parties hinder this process.”

I imagine Howard refers to the coalition of Partners’ competitors who say the deal will raise costs, but maybe he means Coakley’s rivals in the race for governor.  Democrat Steve Grossman calls the deal a failure that could “take us down the wrong path for many years to come.” And Don Berwick, who also faces Coakley in the Democratic primary, has submitted a petition with 456 signatures called “Block the Partners deal.” Continue reading