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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

No Court Filing Yet In Partners Deal To Expand

WBUR’s Martha Bebinger reports that a negotiated agreement that would have let Partners HealthCare expand to include South Shore and three other hospitals is on hold.

Partners and Attorney General Martha Coakley had planned to file a deal in court Monday that the AG said would curb Partners’ market clout.

But a spokesman for the AG says “both sides are continuing to negotiate based on the agreement in principle announced last month.”

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

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

The deal would have capped Partners expansion through 2020 after the network, which is already the largest in Massachusetts, was allowed to add the four hospitals and 550 more physicians. Partners had agreed to limit reimbursement increases to the cost of inflation, also through 2020.

But the agreement was criticized by competing hospitals who said it would lead to higher costs. Insurers, consumer groups and employers have asked to review the details before a deal is final. The AG’s office says it expects to allow public comment, although it’s not clear how.

The parties have not set a new date for a filing a final agreement.

Agreement Allows But Limits Partners Growth, Caps Prices To 2020

partners
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:

Dear Colleagues,

I am writing to share some important news concerning an agreement in principle that Partners HealthCare has reached today with Massachusetts Attorney General Martha Coakley. We have been engaged in discussions with her office related to our mergers with South Shore Hospital (SSH), Hallmark Health System (HHS) and Harbor Medical Associates (HMA). The regulators have also been reviewing our contracts with non-employed physicians to understand the extent of their partnership with us. Continue reading

Restraining Partners? Rampant Speculation On A Deal In The Works

What’s up with that Partners-South Shore deal?

This question has come up in every conversation about hospitals in Massachusetts for the past three to four months, at least.  It’s important because the final resolution will be a benchmark for future hospital mergers, acquisitions and partnerships in Massachusetts and beyond. And it may finally address complaints that Partners Healthcare hospitals and doctors are paid more, in some cases much more, than most of their competitors.

If you’ve (understandably) lost track, here’s a recap:

partnersPartners announced plans to acquire South Shore Hospitals in June 2012.

The state’s Health Policy Commission concluded the deal would increase costs $23-$26 million a year.

Partners countered, saying that adding South Shore to its network, currently the largest in the state, would save $27 million a year.

The commission stuck to its original findings and sent a report to Attorney General Martha Coakley.  She, along with the U.S. Department of Justice, have been looking at whether Partners exploits its size and market clout to drive up health care prices and all of our premiums.

There are lots of theories about why we haven’t heard anything since Coakley acknowledged in March that she was in talks with Partners and South Shore.  Is there an impasse?  Are federal regulators clogging up the works?  What kind of pressure is Coakley (who is also running for governor) facing? I’ve heard all kinds of theories. Feel free to add yours below.

Coakley told the South Shore Chamber of Commerce last week that she expects to complete her review of the deal in a month or two.

Working with the Department of Justice, Coakley could sue to try and block Partners from bringing South Shore into its system.

But a deal that would limit Partners clout seems more likely. So what should it include?

Here’s where my random conversations with doctors, hospital executives and patients gets really interesting. The virtual water cooler chatter includes these possible scenarios:

1. Partners can add South Shore — and that’s it.  No further expansion for, say, five years or so (the time frame varies from three to 10 years). Keep in mind, Partners has already announced plans to acquire two North Shore hospitals after the South Shore deal is done.

2. Partners can add South Shore, but it must sell off another hospital of equivalent size or scope. Continue reading

Partners On Anti-Merger Report: ‘Misleading,’ ‘Flawed,’ ‘Inaccurate’

partners

Partners HealthCare does not hold back in the response it plans to file today with the state’s Health Policy Commission (HPC). The commission issued a report last month that marked a rare effort to crimp Partners’ dominance in the Massachusetts market. The commission said that if Partners adds South Shore Hospital in Weymouth to its growing network, costs will increase around $23-26 million a year.

Wrong, says Partners, in an 89-page rebuttal that includes dozens of letters and testimonials from South Shore area leaders who support the merger. The commission should withdraw its finding, concludes Partners, and not send the proposed merger to the state attorney general for further regulatory review.

Some key points from Partners’ response:

1) The merger would not “add $23-26 million in annual physician health care costs.”

Partners says the HPC doesn’t understand how Partners’ physician contracts work. The assertion that the merger “will result in significant annual physician cost increases is based on material misunderstandings of both the Partners payer contracts and the process and goals of the parties’ proposed physician development efforts” in the South Shore Hospital area.

2) If there are any cost increases, they would be “offset” by better value and more efficient care.
Continue reading

For $9,000, Your Personal Genome Sequenced

Updated at 10:52 AM, August 28th, 2013

If you’ve got $9,000 handy and a hankering to learn more about your genetic roadmap, here’s your chance.

Partners Healthcare, the largest hospital system in Massachusetts, announced yesterday that complete genomic sequencing is now available to patients. The full test would take 16 weeks, said spokesman Rich Copp, and insurance coverage would be determined on a case by case basis.

greyloch/flickr

greyloch/flickr

Formerly a technique limited to the laboratory, complete genome sequencing maps the 3 billion pairs of DNA in a human’s genome. In recent years, scientific and technical advances have made genetic sequencing available for clinical use.

That’s a far cry from 2006, when scientists were still diagnosing a “market failure” in providing “rapid, low-cost medical grade genomes.” It was enough to spur the creation of the Archon Genomics X-Prize, which promised a $10 million prize to a team that could sequence 100 genomes in 30 days for less than $10,000 per genome. The X-Prize team ultimately called off the competition, citing commercial interests making the prize incentive superfluous:

What we realized is that genome sequencing technology is plummeting in cost and increasing in speed independent of our competition. Today, companies can do this for less than $5,000 per genome, in a few days or less – and are moving quickly towards the goals we set for the prize. – Peter Diamandis, chairman of X-Prize Committee

But where, exactly, will your new $9,000 map lead you? Shortly after he was diagnosed with cancer, Steve Jobs spent $100,000 on getting his genome completely sequenced. Continue reading