Partners Health Care (the dominant provider network in Greater Boston) and Neighborhood Health Plan (a local mostly-Medicaid HMO) just announced that the former intends to acquire the latter, and maintain it as a separate operating entity. No money will change hands between the parties, but an unspecified amount of money will be given by Partners as grants to community health centers where NHP members receive much of their health care services. Gary Gottlieb, CEO of Partners, graciously allowed that it would not seek to interfere with the current referral patterns of NHP members to the two local safety-net hospitals (which get disproportionate share hospital payments; Partners hospitals do not).
The deal is contingent on several layers of regulatory review, including review by the Commonwealth's Attorney General's Office, which has reported on Partners using its market power to extract high rates of reimbursement from payors that do not correlate to a higher quality of care relative to others around town.
So, is the motivation for the affiliation (a) Partners offering a helping hand to a Medicaid
HMO and a network of community health centers as part of its mission, (b) a rational reaction to market forces in the face of health reform
by Partners, providing a fig leaf for Partners as it faces further scrutiny in the marketplace by regulators and others, (c) an ace in the hole that may be used to win a future hand (e.g., when state, Federal or commercial reimbursement rates get cut further, and Partners can claim it's a special case) or is it (d) simply part of the Partners unified field theory of the marketplace whereby it seeks to extend its influence over payors and non-Partners providers and position itself for future success as an ACO
or other as-yet-undefined new type of provider network with a payor kicker? Probably a bit of each.
The community health center move is just the latest in a years-long chess game of CHC affiliations. The HMO acquisition is something new, though, and will bear watching.
This news comes on the heels of news of some fancy footwork
by John Kerry that tied all Massachusetts hospital Medicare
payments to a wage index related to Nantucket Cottage Hospital (a high-wage hospital on an island) which is part of Partners. (A few other states benefited from this ACA
amendment as well.)
This being a zero-sum game, the $275 million a year extra income flowing to Bay State hospitals comes out of the hides of other states' hospitals. They are less than thrilled.
The continuing question as all of this shakes out is -- or perhaps should be -- whether the Partners-NHP deal advances Don Berwick
's triple aim: improving the experience of care, improving the health of populations, and reducing per capita costs of health care.
David Harlow is Principal of The Harlow Group LLC, a health care law and consulting firm based in Boston, MA.