A Superior Court judge on Thursday rejected a proposed anti-trust settlement with Partners HealthCare governing its expansion in Massachusetts, days after new Attorney General Maura Healey voiced her concerns about the deal.
By GINTAUTAS DUMCIUS
BOSTON — A Superior Court judge on Thursday rejected a proposed anti-trust settlement with Partners HealthCare governing its expansion in Massachusetts, days after new Attorney General Maura Healey voiced her concerns about the deal.
The proposed settlement, which was negotiated by Healey's predecessor, Martha Coakley, would have allowed Partners, the state's largest health care provider system, to acquire three hospitals. Coakley defended the deal last year, saying it was an alternative to litigation and included meaningful cost controls.
Superior Court Judge Janet Sanders said the deal would add three hospitals to Partners' system and at least 800 physicians, eliminating two competitors.
"First, it is not in the 'public interest' as that has been defined by case law," Sanders wrote in a 48-page opinion. "By permitting the acquisitions, the settlement, if adopted by this Court, would cement Partners' already strong position in the health care market and give it the ability, because of this market muscle, to exact higher prices from insurers for the services its providers render."
Sanders said her other reason for rejecting the agreement was her concerns about its enforceability.
"Where a consent decree contemplates ongoing judicial involvement, as it does here, and there are substantial questions regarding enforcement, this alone is sufficient to reject it," she wrote. The proposal "does little to restore any part of the competition that would be lost by these two acquisitions," she added.
The accord spelled out conditions for Partners to acquire South Shore Hospital in Weymouth and merge with Hallmark Health System in northeastern Massachusetts. Founded in 1994 through an affiliation between Brigham and Women's Hospital and Mass. General Hospital, Partners owns seven additional general acute care hospitals in the Bay State and its annual revenue in fiscal year 2012 was $9 billion.
Partners President and CEO Gary Gottlieb expressed disappointment with the judge's decision in a message to colleagues on Thursday afternoon.
"The judge has said 'no' to an agreement that we believe would have paved a pathway to delivering high-quality care closer to home for patients and their families in a lower cost community-based setting," he wrote.
Acknowledging Healey's court filing earlier this week stating she would void Coakley's agreement if the judge rejected it and take Partners to court if the not-for-profit moves ahead with acquiring South Shore Hospital, Gottlieb wrote, "Our leadership team will now take the time to evaluate all of our options."
During a hearing in November, Sanders had asked about Healey's view on the transaction, which she providedMondaya few days after taking office. The judge in her ruling said she delayed issuing the decision so Healey could have a chance to weigh in.
Healey said she has concerns about the South Shore Hospital acquisition, based on input from insurers, providers, and other stakeholders in the health care field.
If the judge did not accept the proposed agreement, "it will be my intention to litigate to stop the South Shore transaction from going forward," Healey told the News Serviceon Thursday, before the judge's decision was released.
She has said she would "further evaluate" the Hallmark portion of the multi-faceted Partners-Coakley deal if it's rejected.
"This is really an issue about health care costs, and people's ability on the North Shore, the South Shore, all over the state to access health care," Healey told the News Service. "Over the last year, as I was campaigning I heard so many stories from individuals and families, and employers and businesses about rising health care costs.
And as attorney general, working with others across the state in government and outside government, we need to do everything we can do to get costs under control."
Healey said studies show that as market power grows the ability to leverage grows with it, and "we've seen real price disparities among hospital systems based on size."
Both Healey and Sanders earlier had raised some of the same concerns about the enforceability and eventual expiration of some of the accord's provisions, including the five-year limit on the number of physicians, restriction of six and a half years for price growth and a ten-year restriction on component contracting.
A top healthcare union, 1199 SEIU United Healthcare Workers East, hailed the ruling.
"As healthcare workers, we applaud this ruling as a critical step towards reigning (sic) in the growth of Partners HealthCare, an entity that for too long has used its position in the healthcare market to drive up healthcare costs for consumers and patients," said Jeff Hall, a spokesman for SEIU 1199, which has 300 health care workers at Hallmark's Melrose-Wakefield Hospital. "Healthcare workers believe this is an important step towards protecting the role of community and safety net hospitals by countering the aggressive and unsustainable Partners business model of high costs for patients and low wages for many Partners employees."
In her ruling, Judge Sanders said Coakley's office "offered no real explanation" about why she chose to pursue the type of agreement that was brokered between her office and Partners.
"Certainly, there appears to be no impediment to a remedy that required Partners to divest itself of certain assets or that would partially block the proposed acquisitions -- a cleaner remedy that would not raise enforcement issues or require ongoing judicial involvement," Sanders wrote.
Sanders repeatedly cited the work of the Health Policy Commission (HPC), an independent agency that monitors the health care market and raised concerns about the effect of the deal on health care pricing.
"As to the acquisitions at issue here, although its conclusions are carefully worded, it is quite apparent that the HPC is of the opinion that they would not be in the public interest," Sanders wrote.
A coalition of health care providers and Partners competitors applauded the judge's ruling "to deny what would have been an unprecedented expansion of the market's largest healthcare system."
In a statement late Thursday, the coalition that includes Atrius Health, Beth Israel Deaconess Medical Center, Lahey Health System and Tufts Medical Center said, "Throughout the court process, Judge Sanders opened the door to public input, and for that, we are grateful. In doing so, Judge Sanders demonstrated just how important the insight of patients, doctors, nurses, caregivers, policymakers, employers, and other stakeholders is to policies that affect both the cost and quality of healthcare in Massachusetts. Her decision preserves the efforts of all those who have worked so hard over the last few years to reform Massachusetts' healthcare system."
State House News Service writer Colleen Quinn contributed reporting
Mary Serreze | Special to The Republican