Steward’s tentative sale raises doubts
A healthcare giant set to purchase a nationwide physician network from financially disgruntled hospital operator Steward Health Care is catching flak from Massachusetts lawmakers who are calling for a careful review of the deal.
State healthcare officials have received notifications in connection with the proposed sale of Stewardship Health Inc. and the contracting Steward Health Care Network to OptumCare, a subsidiary of UnitedHealth Group.
Stewardship Health Inc. is the parent of Stewardship Health Medical Group Inc., which employs primary care physicians and other clinicians across nine states, according to the state Health Policy Commission.
U.S. Rep. Jake Auchincloss raised immediate concerns with the proposal, which he called “alarming,” in a statement yesterday morning after the development came to light Tuesday evening.
“Steward’s physician-led practices provide critical medical care to Greater Fall River & Greater Taunton and should continue to operate,” Auchincloss said. “But the prospect of UnitedHealth Group purchasing Stewardship Health is alarming. UnitedHealth, a Fortune 5 leviathan already under federal antitrust investigation, has spent five decades corporatizing healthcare to the detriment of patients and physicians.
“My constituents in southeastern Massachusetts should not be next in line,” he added.
Steward’s disastrous financial status, which came to the forefront earlier this year, continues to wreak havoc on Massachusetts hospitals and patients, some of whom live in the Bay State’s poorest communities.
The Dallas-based company — the third largest hospital system in Massachusetts — admitted to being millions in debt in rent, with unpaid contracts and other expenses in January. Following ultimatums from state leaders, the company started looking into selling off all their hospitals in the Commonwealth, but the future of all nine hospitals remains uncertain.
But UnitedHealth faces its own trouble. The Wall Street Journal reported late last month that the country’s largest private health insurer is being sued by a California-based nonprofit group of hospitals and doctors over allegedly using its market power to try and force them to agree not to compete for primary care physicians.
The Department of Justice has launched an investigation of the healthcare conglomerate over antitrust concerns.
U.S. Sen. Ed Markey, hosting a news conference at the John F. Kennedy Federal Building yesterday afternoon, highlighted how there could be “big consequences” if Steward’s sale to UnitedHealth goes through.
Markey will be leading a hearing that will “investigate” the role of for-profit companies in the country’s healthcare system next Wednesday in Boston.
The sale could lead to “an increase in costs, a reduction in services, but it could also mean that Optum, UnitedHealthcare, as it comes in to purchase these physician networks also bids away physicians who now work at community health centers, further hollowing out the healthcare services that are provided for the poorest in our state,” Markey said.
Before the sale can be completed, the Health Policy Commission must review the proposal.
The commission doesn’t have the authority to block a transaction but can refer findings to the state Attorney General’s office, the Department of Public Health, or other Massachusetts agencies for possible further action.
Documents filed with the state did not include a cost for the transaction. Under the deal, Optum would acquire a Steward affiliate that includes the company’s primary care doctors and other clinicians in nine states.
Transactions involving the sale of Steward’s eight Massachusetts hospitals would also require review by the agency, and review by the Determination of Need program at the Department of Public Health.
“This is a significant proposed change involving two large medical providers, both in Massachusetts and nationally, with important implications for the delivery and cost of health care across Massachusetts,” HPC Director David Seltz said.
Once all required information has been provided about the sale, the HPC will have 30 days to assess potential impacts of the transaction, according to the agency. If the sale is anticipated to have a significant impact on health care costs and market functioning, the HPC can initiate a full Cost and Market Impact Review, an option that it has often not pursued in the past.
House Speaker Ron Mariano believes the tentative sale could “significantly impact the competitiveness of the health care market” and “cause further disruption during a period of acute instability.”
“The HPC’s statutory authority to review the health care impacts of this transaction should not delay state and federal antitrust authorities from doing their own rigorous review as we all seek to protect patient access and affordability, communities, employees, and the overall health care system,” Mariano said in a statement.