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?
“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.
Looks like Rhode Island would rather create a health system monopoly than allow in a competitor from Big Bad Massachusetts. Partners HealthCare has been trying to acquire the second largest hospital system in RI, but now the governor has pulled together the three biggest systems to see if they can come together instead.
Thankfully, I am not privy to the details of how things operate in Rhode Island and I don’t know how hard these three systems’ heads are being banged together to get them to team up. But my guess is there’s a good chance the parties will fail to coalesce and that Partners will be back.
Here’s what I told the Globe:
“It was clear that some of the powers that be in Rhode Island want to maintain a Rhode Island-dominated health care system,” said David E. Williams, president of Health Business Group, a Boston consulting firm.
“I don’t think it’s actually going to solve any of their economic problems,” Williams said, “and I think it’s reasonably likely that Partners will be back at the table in three to six months after Rhode Island determines that going it alone is not viable.”
Big bad Partners HealthCare plans to take over Rhode Island’s number two player, Care New England. Lifespan, the market leader is trying to keep Partners out by appealing to Rhode Islanders’ resentment of out-of-state players and claiming to have the public interest at heart.
“This is not about Lifespan,” [Lifespan’s CEO Dr. Timothy] Babineau said in an interview. “This is about the future of health care in Rhode Island.”
Actually, Lifespan seems to want to go from being the big fish in a small pond to the only fish, by merging with Care New England and Brown, in a so-called “unified” health system, which is just another word for monopoly.
“Lifespan has correctly identified the threat to themselves — but the idea that that is a threat to the public interest is another matter,” said Williams, president of Health Business Group.
“It’s kind of an obvious move to attack a big company for being from out of state, and [saying] they’re going to hurt our local economy and drive up costs,” Williams said. “Really what’s happening is [Lifespan]
would like to dominate Rhode Island and not have to worry about somebody else.”
PS –It’s kind of funny that the Boston Globe itself has announced its intention to penetrate Rhode Island with more coverage of local matters. Watch out Providence Journal!
Interoperability has a been a buzzword in healthcare for about a decade, but sometimes it doesn’t seem like we’ve gotten that far. In this podcast, Rhapsody’s EVP of Product & Strategy, Drew Ivan and I discuss interoperability: its past, present and future.
Here’s what we covered:
0:20 What is interoperability anyway?
2:50 Why do we hear about interoperability so much in healthcare? Is it an issues in other industries?
5:11 How does interoperability in the US compare to the situation elsewhere?
6:51 Does interoperability matter to patients?
9:20 Has interoperability failed in the past? What new models are being tried?
11:54 What’s the business model for interoperability?
13:42 Are there any downsides? Does interoperability create any new problems?
14:54 How will interoperability evolve in the coming year?