Massachusetts Superior Court Judge Janet Sanders on Thursday rejected the controversial Partners HealthCare deal that would have resulted in the acquisition of three community hospitals. The deal would have added hundreds of physicians to Partners' network, and critics argued, allow the already-dominant (and expensive) system to further raise costs.
Former Attorney General Martha Coakley and Partners reached a final settlement six months ago, marking the conclusion of an AG and federal investigation that had gone on for five years. The terms of the settlement included price caps and limits on Partners' growth and contracting practices. The caps were set to expire in six and a half years—one major concern Sanders expressed in November. "What's to say they don't recoup all their losses [after the cap expires]?" Sanders said. "If they recoup all the money, what have you gotten at the end of the day?"
Although it is unusual for a judge to reject a consent agreement, Sanders decision isn't too shocking. The deal faced tremendous opposition—including new Massachusetts Attorney General Maura Healy, who earlier this week submitted a three-page court filing expressing her strong opposition to the deal—and Sanders herself had expressed skepticism of the validity of the previous attorney general's approval. The deal, which would have made Partners the state's largest healthcare system, was approved by Coakley during a gubernatorial campaign which she lost. Sanders suggested that Coakley's political ambitions may have colored her approval of the deal (sparking hot words from Coakley).
According to Sanders' decision, the deal didn't include strong enough protections to mitigate Partners' market power. Calling the settlement terms a "bandaid," Sanders said that the settlement would "cement Partners' already strong position in the health care market and give it the ability, because of this market muscle, to exact higher prices from insurers for the services its providers render."
This is a devastating blow to Partners, but Sanders' decision doesn't mean the organization won't still proceed with the deal—they just would face an antitrust lawsuit from the AG's office. "Our office is prepared to litigate to block this transaction if Partners chooses to move forward," Healey said in a statement following the decision. "We remain committed to tackling the challenge of controlling healthcare costs while also promoting quality and access."
Partners hasn't commented yet on whether they will move forward with the acquisition. Andrea Agathoklis Murino, an attorney representing Partners' competition, told the Boston Globe that continuing the fight wouldn't make sense for Partners, calling the course of the case "fairly unprecedented."
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