One of the persistent questions I receive from people at BIDMC and outside is, "What is Caregroup?" Here is the answer.
In the mid-1990s, the Partners HealthCare System was established with a merger of MA General Hospital, Brigham and Women's Hospital, several community hospitals, and many physicians. The business concept behind this merger was to establish a new corporate entity that reflected the changed health care marketpace. The new corporation would have better access to capital, garner economies of scale by larger scope, and have more leverage with insurance companies because of its extensive reach and integration of care delivery.
Beth Israel Hospital, the third largest of the adult care Harvard teaching hospitals, was not part of that merger and began to search for its own partner. It joined up with the New England Deaconess Hospital, and added affiliations with New England Baptist and Mt. Auburn, along with three small community hospitals and a number of community physicians. The goal was to establish another integrated health care delivery system -- CareGroup -- to be the bookend to Partners in Eastern Massachusetts.
But many problems soon ensued (which I will describe in future postings), and CareGroup failed as an integrated health care delivery system. A few years ago, therefore, the board of CareGroup, under urging from its member hospitals, redefined its scope. Its main purpose today is to satisfy the fiduciary obligations of the system with regard to previously issued bonds, which are a joint and several obligation of the three hospitals. CareGroup no longer has any clinical responsibilities.
Throughout the country, there are stories of mergers and corporate reallignments gone awry in the hospital world. This is no surprise. I used to be involved in other industries in which competitive market frameworks replaced regulated, cost-plus businesses (electricity, natural gas, telephone -- to mention a few). The first refuge of management in the face of such change was often to look for merger partners, but such mergers often failed. In future postings, I will provide more details about the BIDMC and CareGroup experience, but in the meantime, I would love to receive comments from you about interesting successes or failures from other parts of the country.