Saturday, October 11, 2014
A No Brainer?
In earlier postings I have discussed the proposal of
Partners HealthCare to acquire some additional hospitals in the Boston
area. That transaction requires the
approval of Martha Coakley, Massachusetts Attorney General and Democratic
candidate for Governor. General Coakley
has negotiated an agreement with Partners under which she is willing to grant
approval. However, the deal must also be
blessed by Superior Court Judge Janet I Sanders. According to a Joan Vennochi column in the
October 5 issue of the Boston Sunday Globe, Judge Sanders has reservations, based in
part on the objections that have been filed by a number of parties.
And well she might.
Partners was formed by a merger of the health care giants
Massachusetts General Hospital and Brigham and Women’s Hospital. It is next to impossible to sell a health
insurance policy in eastern Massachusetts that does not cover services provided
by one of them and the merger made it impossible for insurance companies to
play off one against the other in rate negotiations. Partners took advantage of the resulting strength
and forced insurance companies to pay them at substantially higher levels than
are paid to other hospitals.
The agreement negotiated by General Coakley purports to deal
with this issue by putting caps on future price increases. But few knowledgeable people believe that a
powerhouse like Partners would not be able to find ways around that.
Another point is that if the proposed acquisition did not
create inordinate economic power to raise rates, no such agreement would be
necessary. That poses a contradiction. The agreement, if approved, would permit a concentration
of economic power that the requirement for approval was intended to prevent.
Sounds like a no-brainer to me.
