Dive Brief:
- The Massachusetts Health Policy Commission is scrutinizing a proposed affiliation between Partners HealthCare and Hallmark Health System of Melrose, Mass., arguing that the increased market concentration resulting from the deal could give the parties under leverage in negotiating with health payers and raising prices.
- Partners and Hallmark had signed a memorandum of understanding in October to create a new regional affiliation focused on what it care and population health, a deal affecting a total of four hospitals in the region.
- Partners has said that most investments involved in the affiliation would be something to health IT, primary care physician recruitment, and capital improvements and two of the four hospitals.
Dive Insight:
As we have pointed out before, hospital mergers and affiliations are likely to take place at an increased rate over the next few years, as profit margins thin out and reimbursement rates drop. However, some will certainly faced the kind of scrutiny that this deal has, as regulators have a delicate balance to maintain it comes to managing competition in the marketplace. While next year may not be the banner year for hospital M&A, given how much hospitals have on their plate, mergers and affiliations between hospitals should accelerate over the next 24 months.