UHCEF Article of Interest

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Steve Bailey
The Boston Globe (click here for a link to the original article)
15 November 2006

Last May the twin 800-pound gorillas of the Massachusetts healthcare industry, Partners HealthCare and Blue Cross and Blue Shield of Massachusetts, helped organize a summit of the industry’s top leaders at the Hotel Commonwealth in Kenmore Square. A who’s who from the teaching hospitals, the insurers, and academia showed up for the start of an ambitious process. The topic: “Potential for Regional Collaboration to Improve Massachusetts Healthcare: The Economic Case.”

For some of those summoned, it was more than they could swallow. Here was Partners, formed more than a decade ago by the merger of Massachusetts General Hospital and Brigham & Women’s Hospital, the Coke and Pepsi of the state’s hospital industry, preaching the gospel of collaboration? This from an organization that has grown so large and rich that it has essentially redefined the market as Partners and Everyone Else. Paul Levy, chief executive of Beth Israel Deaconess, and Charlie Baker, chief executive of Harvard Pilgrim Health Care, to name just two, dropped out in short order.

The tension between Partners and Everyone Else is rising. As Partners aggressively builds its vision for an integrated network of doctors and hospitals in Eastern Massachusetts and the Cape and Islands, the question is no longer will it thrive, but who else will survive? And for those who use and pay for Partners’ premium vision the answer matters.

Out in the trenches, beyond the comfort of the Hotel Commonwealth, there is collaboration — but competition is fierce, too. The docs’ white coats are off.

On the North Shore, Partners has notified tiny Northeast Health System, which operates hospitals in Beverly and Gloucester, that it will be cut out of a lucrative affiliation accord by year-end, part of a heated dispute over Northeast’s referral of patients outside the Partners network. Forget collaboration: Partners instead will open a $100 million outpatient facility next door in Danvers in 2008.

The race to build cancer treatment facilities in the suburbs is another flash point. Two years ago Beth Israel pitched Partners’ Newton-Wellesley Hospital about sharing Beth Israel’s underutilized radiation center nearby in Waltham. Beth Israel’s Levy even offered to move Waltham’s expensive linear accelerator to Newton-Wellesley. But Partners said no, and now is seeking state approval to build its own $13.2 million radiation center in Newton. Beth Israel Deaconess is trying to block it.

“This seemed to be a clear case,” says Levy, “of where two hospitals could share and optimize the use of an expensive facility to benefit the public and benefit both hospitals . . . Basically we were turned down.”

Newton-Wellesley’s president, Dr. Michael Jellinek, cites a range of problems with Levy’s proposal. And his boss, Dr. James Mongan, Partners’ chief executive, sees his organization as a pussycat of a competitor. Society itself, he says, is conflicted about when it wants nonprofits to collaborate and when to compete.

“I would wind the clock back to the 1970s to more of a utility or regulatory model,” he says. “But my side didn’t win.”

Mongan’s competitors don’t see a pussycat. “Pussycat like in lion?” asks a chief executive of another big hospital.

Today Partners, with its strong advantages in physician networks, capital, and reputation, has about 22 percent of in-patient discharges inside Interstate 495, about twice its nearest competitor, the struggling Caritas Christi system. Southcoast in Southeastern Massachusetts, Beth Israel Deaconess, and Boston Medical are all in the 6-percent range.

Thirteen years after former Harvard Business School dean John McArthur, developer Ferdinand Colloredo-Mansfeld , and others put together Massachusetts’ two best brand names in healthcare it is clear the merger is working for Partners. What is less clear after all this time is whether it is working for everyone else.

Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com.
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