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Partners HealthCare, Harvard Pilgrim Consider Healthcare Merger

A healthcare merger may occur between Massachusetts-based Partners HealthCare and Harvard Pilgrim as the organizations explore ways to reduce costs and improve outcomes.

Healthcare merger

Source: Thinkstock

By Jacqueline LaPointe

- Partners HealthCare and Harvard Pilgrim may be heading for a healthcare merger as the organizations consider a partnership to reduce costs and improve outcomes.

“As the healthcare environment changes and insurers and providers increasingly share financial risk, traditional relationships are shifting,” Partners spokesperson Rich Copp told RevCycleIntelligence.com in an email. “Partners HealthCare is constantly exploring new partnerships and relationships with other providers and insurers with the goal of improving the delivery of healthcare to patients both locally and around the world.”

“Harvard Pilgrim is certainly among those organizations,” he continued. “Both of our organizations are taking the opportunity to explore ways that we can work together to improve the patient experience and quality of care while controlling medical trend and reducing costly administrative burden.”

A spokesperson from Harvard Pilgrim also told RevCycleIntelligence.com that the healthcare organizations were having “exploratory conversations” on how the health system and insurer could reduce costs while enhancing outcomes.

“These conversations are occurring in a very dynamic healthcare environment in which the organizations that will be best positioned for future success are those that can create a truly seamless end-to-end consumer experience that improves health outcomes and lowers costs,” Harvard Pilgrim spokesperson Joan Fallon said. “We believe that a world-class healthcare delivery system working together with one of the nation’s most respected health plans holds great promise for meeting this goal.”

But how the partnership would unfold is still up in the air. “We are assessing a number of potential models for how this could best work,” Fallon said.

“This could involve a range of options from new contractual arrangements to deeper clinical, operational and financial integration of our organizations. While we are very excited about these conversations, they are very preliminary and no final agreements have been reached. We remain committed to the communities we serve, including our patients, customers, public officials and provider partners across the delivery system. Part of that commitment includes updating our constituents when we have more definitive information to share.”

Partners is already a powerful player in the Massachusetts healthcare market with 16 hospitals, including Brigham and Women’s Hospital and Massachusetts General Hospital, as well as 29 physician groups, 24 imaging centers, and 22 urgent care clinics, according to data from Definitive Healthcare.

The health system also draws in over $7.2 billion in net patient revenue, placing it in the 98th percentile for financial strength across the country.

While already a large health system, Partners has recently been looking to expand its footprint. The health system inked a definitive hospital merger agreement in February 2018 with Rhode Island-based Care New England Health System.

The Massachusetts Public Health Council also greenlighted a proposed hospital merger between Partners and specialty hospital Massachusetts Eye and Ear.

However, Partners has met opposition from local stakeholders. For example, Brown University President Christina Paxson recently opposed the proposed merger between Partners and Care New England Health System.

“Doing so is likely to lead to specialty healthcare shifting to Massachusetts, impeding access to healthcare for Rhode Islanders and especially for members of the state’s underserved communities,” she wrote. “It also would likely increase the cost of care and reduce the ability of Rhode Islanders — consumers, businesses, healthcare workers and policy-makers — to have a voice in how our healthcare system works.”

Others in Massachusetts have also questioned if acquisitions by Partners would result in higher healthcare costs. Recent research showed that hospitals with higher costs tended to have increased market power, which stems from acquisitions.

The most recent rumors of a Partners and Harvard Pilgrim merger may draw similar criticisms. But the organizations are optimistic that a potential partnership could help both the provider and payer side take on the financial risk associated with improved outcomes and lower costs.

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