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Economists oppose Partners, South Shore merger

Twenty-one academic economists have sent a letter to Massachusetts Attorney General Martha Coakley opposing Boston-based Partners HealthCare's proposed acquisition of South Shore Hospital in Weymouth, Mass., according to a report from The Patriot Ledger.

The group of economists is led by David Dranove, PhD, and Leemore S. Dafny, PhD — both professors at Northwestern University's Kellogg School of Management in Evanston, Ill. Dr. Dafny previously served as deputy director for healthcare and antitrust in the Bureau of Economics at the Federal Trade Commission. Based on a review of hundreds of hospital mergers across the country, Dr. Dafny and the other economists who submitted the letter concluded the transactions have consistently failed to deliver their promised benefits and lead to higher prices, according to the report.

The letter states that "Partners' 20-year track record of integration paired with high prices and high medical costs casts serious doubt upon its assertions that the proposed acquisitions would yield substantial efficiencies, let alone of the magnitude necessary to outweigh the alleged anticompetitive effects."

Christopher Loh, spokesman for Ms. Coakley, told the Ledger the economists didn't consider the legal factors that play into the AG's decision. The letter was submitted to provide comment on a tentative settlement between Ms. Coakley's office and Partners that would allow the system to complete its proposed acquisitions of South Shore and Hallmark Health System in Melrose, Mass., under certain conditions. Under the agreement, Partners would have to limit future price increases across its network to the rate of general inflation through 2020. The settlement would also limit Partners' joint contracting with commercial payers.

Earlier this month, Massachusetts Suffolk Superior Court Judge Janet L. Sanders ruled the settlement's court approval would be delayed because of the Massachusetts Health Policy Commission's findings that Partners' takeover of Hallmark would raise spending on medical care by $15.5 million to $23 million per year and increase premiums for employers and consumers. The ruling has subjected the settlement to a public comment period of three weeks, with responses due to the AG's office by Aug. 1.


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