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Under Pressure To Control Costs, Partners And South Shore Forge Ahead

“Nothing we have seen or heard changes our minds about the value that this proposal offers to patients in southeastern Massachusetts. Our combined vision with South Shore Hospital will improve the care that patients receive and will lower health care costs.”

– Rich Copp, spokesman, Partners HealthCare

This is Partners’ response after the Massachusetts Health Policy Commission (HPC) approved a report yesterday that says if Partners merges with South Shore Hospital, the cost of care through those facilities and their related physicians would increase $23-$26 million a year. Both the report’s author and several doctors I spoke to from South Shore say this is a conservative estimate, that cost increases would likely be substantially higher.

The commission does not have the authority to scuttle the merger, but this report is the first time a public body has analyzed the financial impact another Partners merger could have on the state’s attempt to hold down health care spending. Partners, the report says, already has total net assets that are “more than three times the combined assets of the next three largest systems in Massachusetts.” This is about pressure. So what does the board want?

Commission board member Paul Hattis said for Partners to serve its mission of increasing value to maintaining excellence, then “the best way forward is to abandon these proposed transactions.” This merger, said Hattis, would have “frightening implications for increasing total health spending for employers and individuals, particularly in southeastern Massachusetts.”

HPC Chairman Stuart Altman stopped short of asking Partners to scrap the deal, “but they should think hard about changing the structure of the linkage.” Partners could, Altman suggests, pull South Shore Hospital into its network but keep an affiliated physician group, Harbor Medical Associates, separate. Moving Harbor and some other South Shore doctors up to Partners physician reimbursement rates alone would increase costs almost $16 million a year after four years.

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Or, says Altman, Partners “could make a commitment that they would not see any increase in total medical expense and if they did they would give the money to expand mental health services or care for the poor.” The bottom line, says Altman, is that “if you’re going to depend on a functioning competitive marketplace, you really need a functioning competitive marketplace.” Continue reading