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Last week, a Massachusetts Superior Court judge ended the efforts of Partners Healthcare, the stateâs gigantic health system, to acquire three community hospitals. Judge Janet Sanders ruled that Partnersâ grand acquisition strategyâ sealed by a deal it struck last year with former attorney general Martha Coakleyâwas not in the public interest and âwould cement Partnersâ already strong position in the healthcare market and give it the ability, because of this market muscle, to exact higher prices.â Massachusetts already has the highest medical prices in the country. The Coakley deal would have let Partners buy the new hospitals in return for accepting limits on expansion and prices for the next five to 10 years, an arrangement many critics said would still have given Partners tremendous marketing clout. Partners had argued that a bigger network would allow it to deliver better care more efficiently.
In a nice, clear summary of the decision and its fallout, WBUR reported that Judge Sanders cited the work of the stateâs watchdog Health Policy Commission which concluded that the deal would increase healthcare spending by $39 to $49 million a year. Sanders pointed to vague language in the agreement and said it would be too difficult to enforce. Coakleyâs proposed remedies (the temporary price and expansion limits), Sanders said, would be âlike putting a band-aid on a gaping wound that will only continue to bleed (perhaps even more profusely) once the band-aid is taken off.â Her ruling is significant and offers important insights into the march toward consolidation and concentrated market power of hospitals as well as insurance companies in other states. New Jersey, Pennsylvania, Idaho, North Carolina, Florida, and Illinois come to mind.
The judgeâs ruling dug deeply into the questions and issuesâlike, is this in the public interestâthat the stateâs media, particularly the Boston Globe, have been slow to examine. As I wrote in July, the Globe, which did a stellar job in 2008 reporting on Partnersâ role in the stateâs high healthcare costs, seemed to have lost some of its earlier tenacity, offering instead tepid play-by-play Partners coverage last year. It was a coalition of the hospital systems competing with Partners and other organizationsânot reporting by the stateâs news mediaâthat pressed the judge to allow public comments on the deal. The 174 comments, mostly from opponents, no doubt helped persuade the judge to take a second look at the deal which initially was widely expected to win judicial approval. In early November, the Globe finally published an important piece on the Partners affair, reporting that ânone of the negotiators was prepared for the pushback.â Praising that piece, I noted that the Rev. Burns Stanfield, president of the Greater Boston Interfaith organizations, admitted âpeople are very careful talking about Partners. But once they started talking, they kept talking.â
The talk will continue. The Partners story is not over. At the end of its piece, WBUR set its own reporting agenda that other media outlets might follow as well: Does Partners press ahead with its expansion plans? Will the state or federal investigators keep pushing against Partnersâ market power? Will the new governor or legislature campaign for more or less control over healthcare prices?
This case may well have anti-trust implications and set a precedent for showdowns in other states. Georgia State health law professor Erin C. Fuse Brown told the Globe the judgeâs decision wonât stop the national wave of hospital consolidation, but âit certainly throws some cold water on plans of big hospitals to buy up other hospitals.â For reporters in other states there are two major takeaways.
1) Boning up on the ins and outs of antitrust law canât hurt. One expert told the Globe the kind of remedies pursued by former AG Coakley are no longer favored by antitrust scholars and federal enforcement agencies. Itâs wise to remember that reporters got caught flat-footed because they didnât understand IT issues when healthcare.gov failed.
2) Understanding the competitive positions of the opposition to big takeover efforts is crucial. Sometimes I think we forget how to work a story from the outside in. I liked the winners and losers column by the Globeâs Shirley Leung. Compiling a list of potential winners and losers might just be a good reporting tool for figuring out where to report the next big fight in your state. Such a list might give a clue as to who might be interested in talking.
Related coverage:
The Boston Globe owned the health policy beat once. Where did that tenacity go?
What Weâre Learning About Hospitals, Part I
The Big Boys: hospitals and their pricing muscles
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