Health Business Blog

Health care business consultant and policy expert David E. Williams share his views

Partners opens lucrative outpatient clinics. I’m quoted in the Boston Globe

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An under-appreciated consequence of the BI-Lahey merger is that Partners now feels it can act with impunity. Until recently, Partners HealthCare dominated the Eastern Massachusetts market. As such it was the focus of government and public sector scrutiny and was somewhat constrained in its ability to act.

But now, Beth Israel Deaconess Medical Center and Lahey Clinic have received approval to consummate their merger. BI-Lahey and Partners are similar size, so now the pressure is off Partners to show restraint. In fact, it is taking the opportunity to catch up in some areas where’s it been lacking.

The Boston Globe (Partners HealthCare plans new outpatient clinics) documents one way Partners is taking advantage of the new market reality:

Partners chief financial officer Peter K. Markell said the merger didn’t trigger Partners’ plans to open new clinics. “I think we would have done it anyways — but it doesn’t hurt,” he said in an interview.

Partners and other hospital systems often charge facility fees at their outpatient locations.

“People like to talk about how big we are, but if you look at us geographically, we’re not well-rounded,” Markell said.

“We’re going to put a lot more focus on ambulatory growth,” he added.“That’s where we think the marketplace is going.”

I’m quoted in the middle of the article

“Partners is expanding in the most lucrative lines of business that they can — putting outpatient facilities in high-income suburbs,” said David E. Williams, president of the Boston consulting firm Health Business Group. “This is a very good way to make money. Previously, Partners might have faced more scrutiny for making these kinds of expansions, but now with BI-Lahey, they won’t get as much pushback as they might have gotten before.”

Partners is quite happy with the BI-Lahey merger. Those paying insurance premiums and healthcare bills are going to be a little less enthusiastic.


 

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

#CareTalk November 2018: Bipartisan breakthroughs in health policy

The latest edition of #CareTalk is out. CareCentrix CEO, John Driscoll and I dig into the healthcare impact of the recent election.

Here’s what we covered:

  • (0:32) What are your keys takeaways for healthcare coming out of the 2018 mid-term elections?
  • (3:09) Medicare Advantage plans can offer supplemental benefits in 2019. Is this a big deal?
  • (6:22) The Trump Administration wants to tie some US drug prices to foreign benchmarks. Is this a serious proposal?
  • (8:17) Are you surprised to see the FDA clamp down so strongly on vaping?

Lightning round

  • (10:29) Did you talk about healthcare at the Thanksgiving table?
  • (10:57) Will the Supreme Court overturn Roe v Wade?
  • (11:30) How are you liking your new Apple Watch?
  • (12:01) How about them Red Sox?

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

A couple observations about Tuesday’s elections

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Checking the box

Healthcare was on the minds of mid-term voters this week. Candidates emphasized healthcare in their campaigns and voters in at least six states had an opportunity to weigh in on healthcare via ballot questions.

One observation is that voters are being asked to decide some fairly technical questions, including whether dialysis center profits should be capped in California, whether hospitals should have to maintain specific nurse staffing ratios in Massachusetts, and whether Medicaid eligibility should be expanded or current expansions extended in Idaho, Utah, Nebraska and Montana.

The California dialysis measure was the most fascinating. It was essentially a proxy war by the SEIU, which wants to unionize dialysis centers, against the big gorillas in the dialysis industry: Davita and Fresenius. To get a sense of the stakes, the companies ponied up more than $100 million to fight the measure and were very successful. Davita’s market cap rose by $1.2B the day after the election, if that tells you anything. Both the pro and anti groups had the word “Patients” in their name, which is typically a good hint that patients were incidental to this effort.

In Massachusetts, the nurse’s union was behind the ballot question, while hospitals opposed it. Initially the polling looked good for the measure –after all who doesn’t want adequate nursing– but hospitals managed to throw enough doubt and confusion into the measure to set public opinion against it.

In both cases, the ballot questions may set the stage for future state-level legislation.

Medicaid expansion results were interesting. The questions passed in the conservative states of Idaho, Nebraska and Utah, but failed in Montana. Interestingly, the Utah measure included a 0.15% increase in the sales tax, enough to offset the incremental cost to the state.

The Montana situation was different for two reasons. First, it was a proposal to continue the expansion that was approved by the legislature in 2015 with a sunset provision. Second, it included a big tobacco tax, amounting to about $2 per pack of cigarettes. That apparently was too much for voters to handle.

Idaho, Nebraska and Utah join Maine as the only states to institute Medicaid expansion via ballot initiative. Implementation of Maine voters’ will was stymied by Republican Governor LePage. Now that he’s being replaced by a Democrat, Maine can be expected to implement the expansion along with the others.

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