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What's the story behind the story?

Posted Aug 11 2011 11:55am
When you read a story and it doesn't make sense on its face, you have to wonder what's behind it.  Today's example is this one from the Boston Globe:

Partners HealthCare System Inc., the state’s largest hospital and physicians network, has signed a letter of intent to acquire Neighborhood Health Plan, a Boston-based nonprofit that insures more than 240,000 mostly low-income residents across Massachusetts.

I am speculating, of course, but there are two ways to look at this.  One is that PHS is trying to lock in a set of relationships and customers for the future; but that doesn't make sense because these patients are poorly reimbursed.  Also, the company has promised that it will not use this new relationship to limit those patients' choice of providers.  So to make that work, it would have to develop new models of care that enable this group of patients to be profitable, notwithstanding Medicaid rates that are acknowledged to be too low.  A worthy, but very hard row to hoe when you operate a high fixed cost network.
The other is that a trade has taken place, related to the fact that the holding company has been facing state and federal antitrust reviews.  It agrees to provide some financial assurance to a financially stressed insurance company and community health centers serving mainly the indigent, in return for being allowed to keep other human resource or geographic assets that might otherwise be subject to a divestiture that would have reduced its market power.
Or maybe they just want to make sure care is accessible to everyone.
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