May 20, 2019

May 20, 2019

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Partners HealthCare System’s Proposed Acquisition Settlement Rejected by Massachusetts Superior Court

A Suffolk County Superior Court judge rejected a proposed settlement that would have allowed Partners HealthCare System to acquire three community hospitals north and south of Boston, Massachusetts. The proposed deal – which had been negotiated between Partners and the Massachusetts Attorney General’s Office as a result of its investigation into the acquisitions – would have allowed Partners to acquire South Shore Hospital, Harbor Medical Associates, and Hallmark Health Corporation in return for agreeing to a handful of conduct stipulations for a period of time, including a prohibition on joint contracting, price caps, and temporary limits on future expansion. Superior Court Judge Janet L. Sanders – who described the written comments from the Massachusetts Health Policy Commission (HPC) as “invaluable” in reaching her opinion – found that the settlement did not sufficiently address the competitive concerns associated with the acquisitions.

Managing Principal Tasneem Chipty serves as an expert advisor to the HPC.  The HPC was established in 2012 to develop health policy to reduce the overall increase in costs and improve the quality of care, while monitoring the health care delivery and payment systems in Massachusetts. Dr. Chipty and an Analysis Group team that included Vice President Greg Rafert, Manager Daniel Andersen, and Associate Ben Landsberg participated in the HPC’s cost and market impact reviews (CMIRs) of Partners’s proposed acquisitions and assessed their anticipated competitive effects. Based on this analysis, Dr. Chipty concluded that Partners’s proposed acquisitions would likely eliminate the head-to-head competition that currently exists between Partners and each of the three community hospitals, and that there is no support for Partners’s claimed efficiencies from redirection of care to local area hospitals.

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