- Partners Healthcare is in merger talks with Harvard Pilgrim Health, one of Massachusetts’ largest health insurers, The Boston Globe reports.
- Both companies confirmed to the Globe last week that discussions have been underway for months over various options, including Partners acquiring Harvard Pilgrim.
- Massachusetts Gov. Charlie Baker, who headed Harvard Pilgrim for a decade, said any deal would be carefully scrutinized for its impact on consumers and costs.
If a deal is reached, it would be yet another example of the vertical integration occurring across healthcare. Providers and payers are looking at partnerships to improve care integration and coordination, and in some cases increase market presence.
Last month, Hartford HealthCare, with six hospitals across Connecticut, partnered with Tufts Health Plan of Massachusetts to form a health insurance company. Called CarePartners of Connecticut, the joint venture will focus on providing Medicare-eligible seniors the option of enrolling in a Medicare Advantage plan.
And December saw CVS Health and Aetna propose a $69 billion merger. If approved, it could steer patients to low-acuity and preventive care in low-cost settings.
Boston-based Partners is the largest health system in Massachusetts and includes such big-name teaching facilities as Massachusetts General Hospital and Brigham and Women’s Hospital.
The nonprofit system posted a $53 million gain in operating income in fiscal year 2017, after suffering a $108 million operating loss the previous year. That downturn was tied mainly to losses at Neighborhood Health Plan, a Medicaid managed care subsidiary. Financials bounced back after NHP stopped enrolling new members of MassHealth, the state Medicaid program, and focused on more profitable endeavors like employer health plans.
Partners has been actively pursuing deals on a number of fronts. In January, it signed a definitive agreement to merge with Care New England, Rhode Island’s second-largest health system. CNE, which lost about $115 million in operations overs the past two years, recently shuttered Memorial Hospital’s emergency department in Pawtucket, Rhode Island, effectively closing down the hospital. To satisfy state regulators, CNE agreed to open a walk-in clinic in its place.
The following month, Partners and CNE asked Lifespan, Rhode Island’s largest health system, to join their merger talks. Meanwhile, Prospect Medical Holdings and Brown University, which has a medical research affiliation with CNE, have offered an alternative merger proposal to avert what they fear could shift control of Rhode Island’s healthcare to another state.