Wednesday, June 11, 2014

Oh, some of them are awake after all

A group of hospitals and a major multispecialty practice has finally woken up to the negative impact the AG-Partners deal will have in the Massachusetts health care market.  Here's the Boston Globe story and a companion from WBUR.

The problem, of course, is that these will be viewed as self-serving comments by the competitors of PHS.  More powerful comments would be those that come from the business community (like Associated Industries of Massachusetts, the Greater Boston Chamber of Commerce, the Business Roundtable, the MA Taxpayers Association; Health Care for All and other public advocacy groups and unions like SEIU 1199; and insurers.

Where are they?  Asleep at the switch, I'm afraid. Are they so intimidated as to not pursue their own self-interest?  And what about the Governor, and the gubernatorial candidates, and the attorney general candidates?


Anonymous said...

Paul - I agree with you that this should be front page news and the silence of so many organizations impacted by this decision is stunning. Truly stunning given the ramifications across healthcare, business and every consumer in eastern Massachusetts. The monopoly that is Partners has cemented a deal to gobble up South Shore and continue to charge rates FAR above the market with built in inflation protection. I don't think Standard Oil had as good of a deal that has been agreed to by those supposed to be overseeing Partners. Again, I hope these same groups don't start begging and pleading for help when NEMC or Steward hospitals announce closures or layoffs as a result of these decisions in favor of Partners. The overall decrease in reimbursements from Medicare and Medicaid are hitting hospitals very hard across the nation and those rolls are expanding making it difficult for hospitals to operate in the black. Add in a network like Steward leaking over half of their patient care to outside networks like Partners and they simply will not survive... especially as they assume risk for these dollars going outside to high cost networks like Partners. Maybe this is all to confusing for those in charge but it is as clear as day to those that know that there will be a very significant group of losers as a result of this decision and will reverberate across our economy here in eastern Massachusetts. Look at the history of a private equity firm like Cerberus that owns Steward..... you think they will give a care as they layoff thousands of people and close hospitals as they squeeze out their last dollar? Let me be clear on this point.... they will not and those that don't understand this will end up be the ones complaining the loudest.

nonlocal MD said...

Having watched the facts unfold in this case, it seems clear to me that AG Coakley should recuse herself from negotiating this deal with Partners, in view of her gubernatorial candidacy. There is way too much potential for an unwritten quid pro quo involving promised campaign support from Partners in exchange for this agreement which, from all available evidence, represents a sellout. Her notable failure to heed the recommendation of your Health Policy Review Commission pretty much indicates that she had a pre-existing bias in favor of Partners.

nonlocal MD

Anonymous said...

My guess as our Attorney General's Motivation!

Our Attorney General who has been at the forefront on containing Partners high costs - till now - hopes to become governor.

When she becomes governor, she wants a good economy. One of the strongest sectors for job growth in Massachusetts has been healthcare. The strongest individual company has been Partners.

How could it be otherwise? As Paul has identified numerous times, the Partners hospitals have made "monopolistic" profits for over 20 years and have invested them building "taj mahals".

A new governor is worried less about the long term effects of high Partner's cost on the rest of the Massachusetts economy than preventing layoffs that might be necessary, in the sector and company growing best. if Partners had to reduce staffing due to lower reimbursement.

[What Coakley is missing is Partners loss, of market share and jobs will be partially or totally recovered by its competitors. As Partners losses pricing power and staff, its competitors will be hiring to as they take market share.

Many Partners competitors want Partners prices to converge with theirs, eithers Partners comes down (preferable) or theirs go up. But the current Partners deal increases the disparity.

Much of the care Partners provides is "routine", and that at the big academic medical centers like MGH and Brigham and Womens cost twice as much as high quality community hospitals and also much more than most other academic medical centers and teaching hospitals. Even Partners local community hospitals cost more than local competitors.

Partners has done a poor job of controlling costs and limiting price increases.

This new deal protects Partners from its own folly. Any loss of market share (if it finally happens - due to limited networks, tiered networks, etc ), is made up by relatively higher prices than its competitors.

Lets hope the Attorney General will better understand that while Partners has directly created jobs, its high costs have put a anvil around the legs of others Massachusetts companies around the world.

Massachusetts has either the highest or close to the highest health care costs in America. Partners pricing power drove that, as the Attorney General helped delineate.

If health costs are brought down [which in the Massachusetts context means bringing Partners costs down relative to its competitors], the whole Mass. economy benefits as does the Governor who overseas the renewal of the "Massachusetts Miracle".

Anonymous said...

What about patients and families? Partners does a poor job at including the patient and family voice and isn't health care about the patient?

Anonymous said...

Partners’ track record in managing costs is striking if you look at their information technology initiatives. Who else in this market can write off $100M project to standardize patient registration via Siemens custom development and then embark on an EpicSystems implementation currently projected to cost $1.6B, yes billion. Where are the press inquiries? To me this is emblematic of systems ability to waste dollars garnered through their preferential payments.

Coakley’s political caving is extremely disappointing. Where are the other candidates on this issue? Two of them (Baker and Berwick) are industry mavens and should be able to comment intelligently.

The ability of a system to subvert a DOJ process and complete the acquisition of almost all independent hospitals before taking a break is a clear example of a monopoly. What are the remaining protections to consumers and the healthcare industry?

Just color me jaded….

nonlocal MD said...

Your AG Coakley appears to have done the subverting of the DOJ, no doubt because it was a required part of the deal by Partners, to get the feds off their backs while locking in their high rates. Her acquiescence to that requirement is a real travesty since, as anon 6:51 says, she is removing the last remaining protection for patients at the same time as she sells them out herself. I say again, she should be recused from any further negotiations as she clearly has a conflict of interest as a current gubernatorial candidate. Who wants to thwart the most powerful institutional interest in your state?

Anonymous said...

Hi Paul,

Saw this article, thought you might find it interesting. Not sure where to post.

Commonwealth Fund comparison of health systems in wealthy countries on quality and cost.

Paul Levy said...

Thank you!

Barry Carol said...

I think it would be in the interest of both large self-funded employers and unions, especially the public sector unions, to encourage insurers to implement reference pricing where it makes sense including for imaging, colonoscopies, hip and knee replacement surgery and maybe routine childbirth. Robust and reassuring information about care quality should also be provided to insured members. The reference price could be set at approximately the highest price paid to providers other than Partners.

If members have significant out-of-pocket cost exposure if they choose to go to a Partners facility and they come to learn that Partners commands significantly higher prices per service, test or procedure across the board for care quality that is no higher than at other hospitals and clinics, it could move market share away from Partners over time or force them to lower their prices, Requiring disclosure of actual contract reimbursement rates would also be helpful, especially to referring doctors.