State Wants Heads Up On Health Care Affiliations
Hospitals or health insurance providers that plan to merge, acquire or affiliate with another health care system must notify the state's new Health Policy Commission (HPC) of their plans, under interim regulations the commission adopted last week.
The change affects the proposed merger of South Shore Hospital with Boston-based Partners HealthCare. While a finalized merger is still several months away, the proposal must now be submitted to the commission, an agency created under the 2012 cost control law, which will look at the impact to health care costs, quality and access to services in areas affected by the merger.
The Department of Public Health held a hearing on the merger last week in Weymouth.
The HPC, an independent state agency, is charged with implementing the health care cost control law passed in 2012, monitoring health care delivery, and developing policies to reduce costs.
In the cost containment law, the commission was given the authority to conduct market impact reviews to look at mergers of acute care or large provider networks, but it does not have the power to deny or prohibit a transaction. However, an organization cannot move forward with a transaction until after the commission reviews the impacts, and issues a public report, according to David Seltz, executive director of the commission. After reviewing proposed mergers or acquisitions, the HCP could make recommendations to other agencies with regulatory oversight, such as the attorney general's office.
Under the interim regulations, any hospital or provider organization with $25 million or more in net patient service revenue will be subject to the regulation if they propose a “material change” to operations or governing structures. They must notify the commission of their plans no less than 60 days before the effective date of the proposed change.
The purpose of the review is to inform the public about what the transactions will mean to their health care costs, quality of service and access, Seltz said.
Precursor To Higher Prices?
“Past experience tells us that when large hospital systems merge and consolidate that can lead to higher prices. We are seeing a lot of proposed consolidations in the marketplace, and part of our role is to examine those consolidations and say 'Will this lead to higher prices? Or will this lead to better quality and care coordination?'” Seltz said after the meeting. “We need to critically examine the claims that these transactions will lead to savings on behalf of consumers.”
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