Partners HealthCare, South Shore Decision Could Change State Health Industry

Federal investigators' upcoming ruling on Boston-based Partners HealthCare System's proposed acquisition of South Shore Hospital in Weymouth, Mass., could have a significant impact on cost and consolidation activity in the state, according to a report from The Boston Globe.

If Department of Justice officials allow Partners — the state's largest hospital and physician organization — to acquire South Shore, Partners' increased market power could drive up costs, according to the report. However, if the deal gets shot down, the decision could set precedent for more intense antitrust scrutiny that would make it harder for hospitals and health systems to carry out future mergers and acquisitions.

If federal regulators determine the merger would drive up prices, they could seek an injunction to stop the merger, although they cannot block it outright, according to the report. Regulators could also ask Partners to make concessions such as divesting other hospitals.

The acquisition is currently still under review, South Shore spokeswoman Sarah Darcy told the Globe.

Partners is also the subject of a broader review because of alleged anticompetitive behavior, according to the report. The Department of Justice and state Attorney General Martha Coakley’s office have interviewed executives from Partners, its competitors and health insurers as part of the ongoing effort.

Massachusetts' first annual healthcare report drew further attention to Partners last month. It found Partners received 31 percent of the money Massachusetts commercial payers spent on acute-care hospital services last year. Partners-affiliated physicians also received 25 percent of payers' physician reimbursements in 2011.

Partners responded to the report's findings, saying the system cares for about 1.5 million patients each year, reasoning the results.

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