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.