January 3, 2018

HPC: Partners, Mass Eye and Ear deal could cost $61M annually

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The proposed acquisition of Massachusetts Eye and Ear Infirmary in Boston, and its physician group, by Partners Health Care, will be reviewed by Attorney General Maura Healey and the Department of Public Health, after the Health Policy Commission issued a report finding the deal could increase healthcare costs by millions each year.

The Massachusetts Health Policy Commission (HPC) issued a final report Wednesday on its review of a proposed merger between Partners HealthCare and Massachusetts Eye and Ear Infirmary, saying the deal could increase healthcare spending in the state by up to $61 million per year.

That increase would be driven by commercial rate increases for hospitals and physicians if Partners' proposal to acquire Mass Eye and Ear goes through, according to a statement from Stuart Altman, chairman of the HPC.

Partners and Mass Eye and Ear entered into an agreement in May, under which Partners would acquire Massachusetts Eye and Ear Infirmary and its physician group, which was subject to an automatic review by the HPC.

The final report was issued after the two Boston-based providers were given a chance to respond to a preliminary report in November, according to a statement from the HPC, which reviews healthcare mergers that could increase healthcare spending in Massachusetts.

"The parties anticipate certain operating savings, but they concede that they expect some rate increases as a result of the transaction, declining to offer any commitment to limit such increases. These increases will impact consumers and businesses in the Commonwealth who will likely see higher premiums as a result. Additionally, these higher prices may impact tiered and limited network products, either by undermining the savings those products offer or by reducing access to Massachusetts Eye and Ear's high-quality specialty care for members of those plans," Altman said.

Among the HPC's key findings was estimated increased annual commercial spending of at least $20.8 million and up to $61.2 million, if Mass Eye and Ear rates increase to the same level as Partners' rates following the transaction. Furthermore, the HPC said it is unclear that the transaction is necessary to improve quality, as Partners and Mass Eye an Ear have stated, and the HPC also said it's unclear that the merger will improve access to Mass Eye and Ear services, as the organizations have claimed.

The results of the HPC review will not necessarily block the deal, but will be weighed by Attorney General Maura Healey, and the Department of Public Health, which will now review the transaction.

Partners spokesman Rich Copp said Partners looks forward to working with Healey and the DPH as the process moves forward.

"This partnership will strengthen the clinical and scientific relationships between our organizations and will make Mass. Eye and Ear services and research accessible to a broader population of patients," Copp said in a statement Wednesday.

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