Partners HealthCare. Too big to succeed?

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Too big to nail?

Question: How do you know when a non-profit healthcare organization is getting too big?

Answer: When it’s considering spending over $100 million to change its name.

Partners HealthCare was founded in 1994 when Massachusetts General Hospital and the Brigham and Women’s Hospital decided to team up (“partner”) to defend themselves against Blue Cross and Harvard Pilgrim, which for a brief moment had gained the upper hand as managed care caught on. As a new MBA at the Boston Consulting Group, I remember seeing the projections: MGH and the Brigham were going to be in trouble as Massachusetts copied California and drove down hospital utilization.

Insurance companies didn’t need to include both MGH and the Brigham in their networks–so they tried to play them off against one another to get better rates. That’s why Partners was created.

The two hospitals never wanted to merge and in the end they didn’t have to. The healthcare economy boomed, no one could exclude Partners from their network, and Partners was able to use its muscle to do very well in managed care contracting.

Partners got its act together and executed well, especially compared to its local academic and community-based competitors.

A quarter century later, the original partners have acquired several other hospitals and physician organizations. It’s the biggest private employer in Massachusetts by far, and rivals the state government itself in terms of workforce size.

Lately the company has had to deal with its success. Healthcare costs are a big issue in Massachusetts –as they are elsewhere– and Partners is in the crosshairs. The company is built for market power and clinical excellence, which does not lead to the lowest cost approach. And leaders within the Partners hospitals have been reluctant to cede authority to the central organization.

Something has to change. In particular Partners has to do a better job of integrating its various components –or so goes the conventional wisdom.

New CEO, Dr. Anne Klibanski was mostly recently the head of research for Partners.  She’s touted as a great listener, and good at getting people to collaborate. But as I told the Boston Globe (New Partners Chief no stranger to role of uniter)

As a good listener, Klibanski could successfully unite the various factions at Partners. “On the other hand,” [Williams] said, “listening might not be the issue. Partners might need someone to bang people’s heads together.”

Now comes word that Partners is thinking of investing $100 million in changing its name to something more alluring like Mass General Brigham Health. It could be worth it to Partners by bringing the different factions together and for marketing and fundraising purposes. (For sure it will be great for branding and marketing agencies!)  But what does that say about the state of healthcare in Massachusetts?

An expert quoted in the Globe (As Partners HealthCare rethinks its strategy, it’s considering whether to change its name) said it best:

“I don’t think those names matter to ordinary human beings who get health care in our state,” said Alan Sager, a professor at the Boston University School of Public Health. “The underlying fights about decentralized versus centralized power are internal matters for Partners. I don’t think they should plague the public with their own organizational anxieties.”

Partners has great hospitals and great people that make it the pride of Massachusetts. It does make business sense for Partners to consider rebranding. But that doesn’t mean it’s good news for the finances of those footing the bill.

By healthcare business consultant David E. Williams, president of Health Business Group.

 

July 3, 2019

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