Last month the Massachusetts Health Policy Commission (HPC) released its preliminary “Cost and Market Impact Review” of the proposed merger of Partners HealthCare, Brigham and Women’s Hospital and South Shore Hospital. As The Boston Globe reported this morning, today we submit a detailed response explaining why this merger will, in fact, benefit communities in Southeastern Massachusetts.
Our response clearly demonstrates that our combined vision is consistent with the principles of Chapter 224 of the Commonwealth’s 2012 health care legislation and offers a path to help meet the Commonwealth’s new 3.6 percent cost growth benchmark for health care spending. We also acknowledge that this is the first-ever attempt by the health policy commission to conduct such a review, so we’ve provided additional data and information to help ensure that the HPC’s final report is an accurate reflection of the positive impact that this merger will have in terms of improving patient care while slowing health care cost growth.
Our complete response, makes five key points:
1. The preliminary report fails to calculate savings associated with commercial patients.
Our cost savings models project estimated savings of $158.6 million over an eight-year period for commercially-insured patients. The HPC preliminary report acknowledges that Partners’ efforts to reduce care among Medicare patients have been extremely successful and assigns a potential dollar figure to savings associated with continuing these efforts on the South Shore ($6.6 million).
But the HPC failed to calculate any savings that would be realized among privately insured patients. The HPC ignores the transformative potential of new care models (population health management) among all patient populations. In other words, the report acknowledges the validity of our cost-savings potential but doesn’t apply it across the board to include commercially insured patients.
2. The preliminary report analysis of market concentration has no basis in antitrust law.
The preliminary report’s conclusions that the merger would create or enhance market power or result in anticompetitive effects are based on a faulty analysis. The preliminary report draws conclusions using antitrust terminology while also acknowledging that it has not applied the well-settled principles of antitrust law to support those conclusions.
Those portions of the Preliminary Report that purport to analyze market shares, market concentration or theoretical market power do so with no legitimate legal basis, so we’re requesting they be stricken from the final report.
3. The preliminary report misstates cost impact.
The HPC incorrectly asserted a $15.8 million “unit price” effect on physician prices. This is based on an incorrect understanding of Partners’ contract terms. The HPC further speculated that $10.6 million in increased costs could be attributed to changes in referral patterns. This assumption is based in part on erroneous assumptions regarding the source of newly recruited physicians. Neither finding can be relied upon as credible.
4. Community support in Southeastern Massachusetts is strong.
Over the past several months, the communities surrounding South Shore Hospital have voiced overwhelming support for this vision of improved, more cost-effective care close to their homes. Community leaders including elected officials, first responders, doctors, nurses, volunteers and concerned citizens have offered their endorsement and have expressed hope that this plan is realized.
Recently, all other community hospitals in the South Shore area have affiliated with larger systems for reasons similar to those cited by South Shore Hospital for joining Partners.
For example, Jordan Hospital, Brockton Hospital and Milton Hospital have joined Beth Israel Deaconess Medical Center, and Quincy Medical Center, Good Samaritan Medical Center, St. Elizabeth’s Hospital, New England Sinai (Rehabilitation) Hospital and Carney Hospital have joined Steward Health Care. We believe the HPC has an obligation to explain its objection to this proposal to the patients and families of those communities.
Partners and SSH are pleased that the Commonwealth recognizes that these organizations deliver high-quality care relative to other Massachusetts hospitals. However, we vigorously disagree with the HPC’s position that the independently high profiles of Partners and SSH eliminate the need for quality improvement through this merger.
Put simply, there is no ceiling on quality. The measurement of quality is a nascent science, and Partners is at its forefront.
Read our complete response to the HPC’s preliminary report.