New AG’s opposition to Partners deal the right call

01.27.2015

This originally ran in the Boston Globe

Maura Healey opposes her predecessor’s deal with the hospital giant.

By Steve Syre, Boston Globe columnist

Well, that was quick.

Maura Healey has been on the job less than a week, but we don’t have to wonder where she stands on the biggest health care conflict in Massachusetts.

The new state attorney general made it clear Monday that she doesn’t like the proposed merger of the giant Partners HealthCare System with South Shore Hospital in Weymouth and two other community hospitals north of Boston.

The deal was explicitly endorsed by her predecessor, Martha Coakley, with lots of strings attached. Critics of the arrangement — including the state Health Policy Commission and Partners’ rivals — say it will allow the giant to become even bigger, making medical care more expensive for everyone in Eastern Massachusetts.

Last week, Healey told the Globe’s Shirley Leung that she understood business appreciates certainty and clarity. This is clarity with an exclamation point.

Good for her.

It’s the right call.

The actual decision about whether to approve the deal that’s on the table rests with Superior Court Judge Janet L. Sanders, but Healey’s court filing on Monday gives the judge every reason in the world to just say no.

Partners operates Massachusetts General Hospital, Brigham and Women’s, and other hospitals. It has several new hospital merger plans on the table, all rolled up in the current proposal. But its agreement to take over South Shore Hospital, in particular, struck a nerve.

Sanders has adroitly played the politics of the entire Partners expansion saga. Presented with Coakley’s qualified endorsement and a raft of public-comment opposition, she expressed doubts but kept the process going without making an immediate decision. She even scheduled a hearing the day after the November election.

At that point, knowing that Coakley would not be governor and that Healy would be the next attorney general, Sanders kicked the can a little farther along to give to give the incoming AG time to make her opinion known. Healey did exactly that on Monday.

Among other things, she said she is poised to file an antitrust lawsuit against Partners to stop the South Shore merger. She also told Sanders she was concerned about how big Partners might become after the expiration of the terms Coakley negotiated to keep Partners from driving up costs and squashing competition.

She also questioned how the Partners network of physicians could continue to expand and sounded skeptical about contracting restrictions intended to limit the power Partners would hold over insurers as a result of its sheer scale.

In her court filing, Healey seemed to take the entire premise of the Partners proposal — approve the mergers in return for promises of future price restrictions and contracting limits — and turn it on its head.

“I would prefer to reverse that order of events and instead consider any future proposed Partners’ expansion only after Partners demonstrates an ability to contribute to health care cost containment in Massachusetts,” the attorney general wrote.

What does that mean?

“I think we’d like to see the price disparity drop,” she said in a brief phone interview.

Healey was referring to the gap between prices Partners’ doctors and marquee hospitals can charge and the lower rates most other health care providers get for similar services. That disparity has been a market reality and a sore subject for Partners competitors for years.

I didn’t like the Partners merger proposals because the organization’s clout and potential growth distort the health care market and affect the way it works. But approval of those deals seemed inevitable when Coakley — long a critic of the hospital chain’s outsized influence on health care costs in Massachusetts — reached an agreement to support them.

Now it’s hard to see how Partners can go forward with those affiliations. The Health Policy Commission, which analyzes medical costs of all kinds, doesn’t like the takeovers. Nor do Partners’ rivals and many of the state’s health insurers. Economists and academics piled on criticism during the court’s public comment process. Healey provided the most serious blow of all on Monday, essentially vacating her predecessor’s endorsement.

Who favors the proposal? Partners, of course, as well as the organization’s closest allies and the merger partners who would benefit. After that, the list gets pretty thin.

Even if the judge turns down the current proposal, Partners could try to push forward with the South Shore merger and attempt to survive an antitrust challenge from the attorney general. But that could be a long and expensive process. A successor to outgoing Partners chief executive Gary Gottlieb would want to think hard before going down that road.

For now, Healey is making her presence felt. Her assessment of both the big picture and the important details are spot-on. I’d call that a good start.

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.

Now it’s hard to see how Partners can go forward with those affiliations. The Health Policy Commission, which analyzes medical costs of all kinds, doesn’t like the takeovers. Nor do Partners’ rivals and many of the state’s health insurers. Economists and academics piled on criticism during the court’s public comment process. Healey provided the most serious blow of all on Monday, essentially vacating her predecessor’s endorsement.

Who favors the proposal? Partners, of course, as well as the organization’s closest allies and the merger partners who would benefit. After that, the list gets pretty thin.

Even if the judge turns down the current proposal, Partners could try to push forward with the South Shore merger and attempt to survive an antitrust challenge from the attorney general. But that could be a long and expensive process. A successor to outgoing Partners chief executive Gary Gottlieb would want to think hard before going down that road.

For now, Healey is making her presence felt. Her assessment of both the big picture and the important details are spot-on. I’d call that a good start.

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.


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