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Deal allows Partners to acquire Mass. hospitals


By Associated Press and Beth Kutscher
Posted: May 24, 2014 - 12:01 am ET
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Massachusetts Attorney General Martha Coakley has reached an agreement with Boston-based Partners HealthCare that will allow the state's largest hospital and physicians' network to acquire South Shore Hospital and Hallmark Health Systems.

Coakley said the deal will also alter the negotiating power of Partners for the next decade and help control healthcare costs in Massachusetts. The agreement follows an antitrust investigation.

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The deal bars Partners from raising costs across its network more than the general rate of inflation through 2020. The rate of inflation has averaged 1% to 2% over the past several years, well below the rates traditionally negotiated by Partners over the past decade.

This price restriction covers all of Partners' providers, including hospitals, outpatient facilities, physicians and healthcare professionals. Any year that Partners doesn't comply with the cost freeze, it will have to refund the amounts charged or received.

Coakley said the agreement must still be finalized and approved by a court. —Associated Press

Highmark names Holmberg CEO, replaces Winkenwerder

Dr. William Winkenwerder
Dr. William Winkenwerder
Highmark last week named David Holmberg its new president and CEO, replacing Dr. William Winkenwerder, who helped orchestrate the deal that transformed the insurer into an integrated delivery network. Holmberg has already assumed his new roles.

Winkenwerder joined the Pittsburgh-based company in June 2012 when it was already in the midst of a contentious campaign to acquire West Penn Allegheny Health System. Under his tenure, Highmark was able to complete the deal, creating one of the country's largest integrated delivery systems.

Yet the company still faces challenges, including turning around operations at West Penn Allegheny.

David Holmberg
David Holmberg
Although its situation is stabilizing, the system reported an operating loss of $15.6 million on revenue of $803.5 million between July and December 2013. Highmark also is in a dispute with West Penn's primary competitor, UPMC, which is refusing to renew its Highmark Health Plan contract when it expires at year's end.

Highmark comprises the insurance division and Allegheny Health Network as well as the Diversified Businesses group, which includes a dental insurance carrier, a stop-loss insurance provider and a chain of optical retail stores.

Holmberg, 55, joined the company in 2007 and has been president of Highmark's Diversified Businesses since July. Before that, he led other Highmark companies.

Follow Beth Kutscher on Twitter: @MHbkutscher


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