EXCLUSIVE: Top Partners HealthCare Executive Caught On Video Talking About Forcing Higher Prices
Monday, May 13, 2019
A video of a top Partners HealthCare executive captures him saying that the company’s near monopolistic model allows them to force higher prices via by forcing higher reimbursement from insurance companies.
Partners HealthCare is in the process of buying Care New England — owners of three of Rhode Island’s hospitals — Women & Infants, Kent, and Butler Hospitals.
“..the payments we get from insurers are higher than the average payments that go to other hospitals and physician groups in this state,” said Peter Slavin, President of Massachusetts General Hospital.
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“One of the reasons Partners was created, but far from the only reason, is that back in the early ‘90s, the insurance companies were playing MGH and Brigham off one another and basically [saying] to the MGH if you don’t accept our lower rates we’re going to move our patients to the Brigham and vice versa,” said Slavin in the video.
"So we came together as Partners — we do contracting together — and now insurers have to take either both of us, or neither of us, and that has helped level the playing field," said Slavin.
Slavin’s comments came in response from a resident at Mass General who challenged the hospital President’s business model.
“I’m one of the emergency residents at Mass General. One of the things I’ve seen in the papers…has been the disparity in the payments the insurance companies have to Partners, including the Mass General system and other hospitals and while in some ways that works really well for us, one of the things that I see is that so many of these outlying hospitals are so close to failure," asked the unidentified resident.
"With a combination of economic pressures, it seems you could get in a situation where a lot of the hospitals that we rely on to take our poorer patients who have a much poorer payer mix could close which could put pressure on the system as a whole — and I just wanted your comments and thoughts on that," he continued -- to which Slavin replied with the above cost statements.
In Massachusetts, Slavin’s Massachusetts General Hospital and Brigham and Women's Hospital are two of the seventy different corporations listed on the Partners HealthCare organization chart. The two hospitals are the largest in New England.
Partners has an annual budget of $14 billion -- 50 percent larger than the state of Rhode Island's budget. The corporation employs more than 70,000.
Massachusetts Rising Insurance Costs
Massachusetts has seen the highest increase in health insurance costs in the country.
“States where workers pick up the largest share of their premium are dispersed across the country: Alabama (26.2 percent), Maryland (26 percent), Virginia (25.8 percent), Massachusetts (24.9 percent) and New Hampshire (24.7 percent),” reports the trade publication Benefits Pro.
In addition, the Commonwealth Fund reports that, “Premiums for employer health plans rose sharply in nearly every state in 2017. After climbing modestly between 2011 and 2016, overall premiums for employer health plans (employer and employee share) grew more sharply in 2017, by 4.4 percent for single plans and 5.5 percent for family plans. Annual single person premiums rose above $7,000 in eight states (Alaska, Connecticut, Delaware, Massachusetts, New Jersey, New York, Rhode Island, Wyoming) and family premiums were $20,000 or higher in seven states (Alaska, Connecticut, Massachusetts, New Jersey, New York, West Virginia, Wyoming) and the District of Columbia. Average premiums for families increased overall in 44 states and the District of Columbia.”
The Commonwealth Fund is a private foundation's mission is to "promote a high-performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, and people of color."
Critics of Partners HealthCare
Healthcare rivals like Lifespan have claimed, “The takeover of Rhode Island’s Care New England Health System by Partners healthcare will increase health care costs for everyone in Rhode Island – for small businesses struggling to provide coverage, for workers stretching to afford premiums – and reduce the state’s ability to control costs,” writes Lifespan.
“Partners, on the other hand, will increase its already hefty profits, for example, by moving high-end medical cases from Rhode Island to its campuses in Massachusetts, where Rhode Island’s caps on hospital reimbursements don’t apply. Meaning Rhode Island health care premiums will be going to Boston at a much higher rate for the same care provided in Rhode Island,” said Lifespan -- Rhode Island’s largest private employer.
Partners HealthCare’s pricing has been criticized by the Massachusetts Attorney Generals for nearly a decade.
Going back as far as 2011, Massachusetts Attorney General Martha Coakley issued her second report on healthcare provider price disparities, saying the state should place temporary caps on prices charged to insurers by hospitals and physicians and highlighted several facilities with higher prices than their peers, including Partners HealthCare, reported Boston Business Journal.
In a lawsuit by then-Attorney General Coakley in 2015 against Partners, the Commonwealth asserted “Specifically, the Complaint alleges that Partners has engaged in unfair methods of competition and, among other things, seeks to enjoin Partners' proposed acquisitions of hospitals north and south of Boston that are currently competitors.”
Coakley’s successor Maura Healey stepped up the opposition of the expansion of the Partner corporation.
In 2015 Judge Janet Sanders formally rejected the proposed consent judgment with Partners HealthCare regarding its potential merger with South Shore Hospital in Weymouth. “… Our office is prepared to litigate to block this transaction if Partners chooses to move forward. We remain committed to tackling the challenge of controlling health care costs while also promoting quality and access,” said Healey.
Merger Review Process in RI
While Partners was stymied by Massachusetts Attorney General Healey and the courts, the corporation is in the midst of the review process in Rhode Island. Partners was granted an expedited review by RI officials.
In Rhode Island, there are now two separate, parallel reviews of Partners acquisition of Care New England – a Change in Effective Control review by the RI Department of Health (conducted by RIDOH), and a Hospital Conversion Act review (by RIDOH and Attorney General Peter Neronha). The different reviews have different criteria.
"A Change in Effective Control review happens when 50% or more of the assets or ownership of a healthcare facility such as a hospital are changing hands. The Director of the Rhode Island Department of Health will make a decision on the Change in Effective Control application after getting a recommendation from the state’s Health Services Council. The transacting parties will present before the Health Services Council roughly 30 days after the application is deemed complete," said Joseph Wendelken of the RI Department of Health.
"Unlike a Change in Effective Control application, a Hospital Conversion Act application needs the approval of both the Rhode Island Department of Health and the Attorney General. A Hospital Conversion Act review is required when 20% or more of the assets or ownership of a hospital are changing hands. Although Hospital Conversion Act applications are not put before the Health Services Council, public meetings will be scheduled to gather community input. The state does not yet have a complete Hospital Conversion Act application (just like the Change in Effective Control application is not yet complete). They will be deemed complete when we have all the documents we need to do our review," added Wendelken.
Both decisions (Change in Effective Control and Hospital Conversion Act) are due within 90 days of the date when the applications have been deemed complete.
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