So the deal is off for the mega-medical conglomerate that dominates Boston’s health care scene. Partners Healthcare, which came so close to buying up several competitors, got slammed by a newly installed attorney general and a judge presiding over the merger decision. So big is Partners in health care–and health care in the Boston market–that this news made the lead headline in the Boston Globe on January 30.
Partners may go ahead with the mergers and face a lawsuit, but my guess is that they’ll sense the trending of the political tides and back away. Everyone understands that dominant health care providers tend to raise costs–but what might we have lost in preventing the merger?
The promise Partners offered was that consolidation would lead to better coordination of care and, ultimately, lower costs. Isn’t that what health care providers are trying to do through mergers and acquisitions around the country? What about the Accountable Care Organizations model–isn’t cost savings through consolidation what Centers for Medicare & Medicaid Services are basically promising? So why is everybody so ticked off at Partners management?
I can’t really say whether the Partners merger would save money. Mergers save a bit of money through streamlined administration, but the effort to combine organizations always leads to a short-term increase in costs that the parent organization must either absorb or pass on to payers and consumers. Furthermore, combining medical records is an expensive headache. It doesn’t even particularly help for the two companies to start with the same EHR vendor, given the unique installation every institution is saddled with.
Ultimately, cost savings must come from better coordinated care. If a hospital can share the complete record of an in-patient visit with specialists to whom patients are referred, and if patient-reported symptoms can lead to quick intervention to prevent a relapse, huge savings are in order. But why do we need a merger to achieve these benefits?
In the 1950s and 1960s, airlines famously combined their bookings in the SABRE system, whose descendants nowadays allow you to browse times and fares for all airlines on a single page. Hard work by popular hotel sites allow you to book a room the same way. Can you imagine the health care providers ever getting together and letting you choose your visit as easily as you choose your airline or hotel?
Costs aside, coordinated care should not be brain surgery. Your medical records should all be open to you, and providers should be able to share them regardless of organizational boundaries. Then we wouldn’t need mergers and ACOs. In fact, health care wouldn’t even stop at the professionals–we’d integrate the home, school, and workplace as dictated by the patients themselves.
Medical treatments are more complex than hotel rooms–they’re more like booking your flight, hotel, rental car, and entertainment package in one place. (But travel sites let you do that too.) Payment contracts are so complicated that doctors are quite honest when they say they don’t know how much your procedure will cost. The comprehensive cost estimates provided by Castlight are one step toward lowering costs by telling consumers what their insurers will cover. More standard quality measures, such as the Patient-Centered Outcomes Research Institute is developing, must also become part of the mix. Lower costs depend on a combination of information-collecting, policy, organizational, and technological change.