For some time running now, it has been useful for Partners Healthcare System to give the impression that it is under intense competition from for-profit Steward Health Care for patients in the Boston metropolitan area. It suits the corporate image of a near-monopoly provider that faces antitrust concerns to characterize things in such a way. The media in town often repeat this contention.
But, as I have made clear for some time, Steward's main competition is not Partners. It is the community hospitals near the ones it owns in several of the areas surrounding Boston.
Now, we hear it directly. Here's a comment from one of the leaders of a physician group (Hawthorn) that has just been acquired by Steward:
Girard said Steward does not consider itself a Partners competitor. Noting that Steward hospitals themselves refer many patients to the Boston organization’s hospitals for some complex care, he said,“We’re actually a complement to Partners.”
As Rob Weisman's Boston Globe story notes:
Partners -- the state’s largest health care and physicians group and the owner of Harvard-affiliated Massachusetts General and Brigham and Women’s hospitals in Boston -- doesn’t run any hospitals along the state’s South Coast where Hawthorn operates.
But what of the physician group acquisitions themselves? Aren't those an indication of competition from Steward? The inside story is that there has often been contention and disaffection between far-flung doctors' groups and the folks at Partners. There is also no loyalty. The community doctors will go where the money is. As I have noted, Steward needs to show top-line revenue growth as part of its private equity strategy. It faces few constraints on what it is willing to pay physician groups, and so it can offer those doctors more than they get from Partners. For its part, Partners really doesn't care. It will still get the tertiary referrals from these doctors but will not longer need to support them financially. And then it can tearfully say, "You see, there is competition."
But, as I have made clear for some time, Steward's main competition is not Partners. It is the community hospitals near the ones it owns in several of the areas surrounding Boston.
Now, we hear it directly. Here's a comment from one of the leaders of a physician group (Hawthorn) that has just been acquired by Steward:
Girard said Steward does not consider itself a Partners competitor. Noting that Steward hospitals themselves refer many patients to the Boston organization’s hospitals for some complex care, he said,“We’re actually a complement to Partners.”
As Rob Weisman's Boston Globe story notes:
Partners -- the state’s largest health care and physicians group and the owner of Harvard-affiliated Massachusetts General and Brigham and Women’s hospitals in Boston -- doesn’t run any hospitals along the state’s South Coast where Hawthorn operates.
But what of the physician group acquisitions themselves? Aren't those an indication of competition from Steward? The inside story is that there has often been contention and disaffection between far-flung doctors' groups and the folks at Partners. There is also no loyalty. The community doctors will go where the money is. As I have noted, Steward needs to show top-line revenue growth as part of its private equity strategy. It faces few constraints on what it is willing to pay physician groups, and so it can offer those doctors more than they get from Partners. For its part, Partners really doesn't care. It will still get the tertiary referrals from these doctors but will not longer need to support them financially. And then it can tearfully say, "You see, there is competition."
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ReplyDeleteFascinating analysis, Paul. As usual you reduce the foggy impressions we have been presented in the public square to clear facts. Deceptively simple process. Thanks for the insight.
Partners was being investigated by the feds for anti-trust activities. What happened to that investigation?
ReplyDeleteAs we await their takeover of Landmark Medical Center and the Rehab Hospital of RI, these issues will come front and center - tiny state up for grabs...
ReplyDelete