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Partners HealthCare System Takeover Being Fought by Antitrust Experts

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A judge in Massachusetts has been asked by 21 national antitrust experts and health economists to block Partners HealthCare System’s takeovers of South Shore Hospital and Hallmark Health System, according to The Boston Globe.

They have warned the judge that the agreement reached between Partners and Attorney General Martha Coakley will not contain rising medical costs.

“We do not believe that the proposed restrictions on Partners’ conduct included in the [settlement] will offset the consumer harm that is likely to arise from the acquisitions of South Shore and Hallmark hospitals and their physician affiliates,” the analysts wrote in a petition sent to Judge Janet L. Sanders.

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Public comment is open through September 15 and a hearing to discuss possible approval of the settlement is scheduled for September 29.

Brad Puffer is a spokesman for Coakley. He defended the agreement, saying, “We considered all of the facts in the context of the lawsuit we could have brought and the remedies we could have potentially achieved. The economists who submitted this letter unfortunately fail to recognize many of the legal factors we had to consider while making our decision. We are confident that this [settlement] does more to control health costs for consumers and alter Partners’ business practices than any lawsuit would have potentially achieved.”

The agreement brings to an end a five-year state and federal probe of Partners and their reported anticompetitive behavior. Charges include that Partners used its market clout to charge more than other hospital groups for identical services.

Partners will be permitted to complete its acquisition of three hospitals; Hallmark’s Lawrence Memorial Hospital in Medford, South Shore Hospital in Weymouth and Melrose-Wakefield Hospital. The deal would also freeze any added takeovers for seven years.

The deal will also limit price increases in the Partners network to the rate of general inflation for 6.5 years. The compliance of Partners will also be monitored for 10 years by an outside monitor.

Leemore Dafny is a professor from Northwestern University Kellogg School of Management. Dafny is a co-writer of the petition submitted to the judge.

“This is a regulatory solution that’s unprecedented in its scope,” Dafny said of Coakley’s pact with Partners. “It’s an attempt by the attorney general to remedy 20 years of behavior stemming from the merger that created Partners. This is a central planner’s approach to the health care system. And in our opinion, it’s not the way to go.”

“Hospital mergers have consistently failed to generate the benefits promised by their proponents . . . ” Dafny and the co-authors wrote. “There is no convincing evidence to date that combining physicians and hospitals under common ownership tends to result in cost savings.”

Rich Copp, the vice president of Partners, said, “A complete and thorough discussion of this topic should include the benefits that come from affiliations among integrated health systems like Partners and community-based hospitals and doctors. And our vision will offer future support for South Shore Hospital and Hallmark Health System. Working together, we will better coordinate care delivered to patients and families in those communities closer to their homes at lower cost.”

Petition Filed Against Partners HealthCare System Takeover by

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