MARCH/APRIL 2015 Worcester Medicine | 23 A recurring theme of health care reform is the need to move away from uncoordinated, feefor-service, siloed care toward integrated, population healthfocused care paid for on the basis of quality outcomes. For example, the Affordable Care Act specifically fosters the development of Accountable Care Organizations to coordinate care among a variety of providers and suppliers and, if quality and cost benchmarks are met, become eligible for additional payments under the Medicare Shared Savings Program. In order to deliver that transformed health care, providers have naturally formed collaborations, affiliations and mergers that enable the delivery of seamless care across the continuum of caregivers, empowered by quality and utilization data that is obtained from a variety of providers, all part of a single system. One of the leaders in this effort has been Partners Health Care, which has engaged in a long series of acquisitions, innovative reimbursement arrangements and health information system innovations. The stated purpose of these efforts has been to provide high-quality, cost-effective care in the most appropriate setting while positioning the entire system to take on risk and succeed in value-based purchasing arrangements. That may continue to be the ultimate purpose, but the actual effect, as demonstrated by the annual Cost Trend Reports issued by the Health Policy Commission, was that Partners dwarfed the competition, with twice the number of commercial insurance hospital discharges than the next four largest systems combined. The HPC also found that this market power led to consistently higher prices charged by Partners’ hospitals and physicians. This market concentration has drawn regulatory attention since at least 2009, when the Massachusetts Attorney General’s Office began investigating Partners for anti-competitive practices. That investigation led to a complaint alleging that Partners violated the state Consumer Protection Act by engaging in unfair methods of competition and seeking to bar Partners from acquiring Hallmark Health Corporation and the parent of South Shore Hospital. That complaint was accompanied by a proposed Consent Judgment that placed certain restrictions on these acquisitions. Recently, a Superior Court judge rejected the Consent Judgment; this decision was followed shortly by Partners’ announcement that it would no longer seek to acquire the South Shore Hospital system. A review of the measures negotiated by the Attorney General’s Office and Partners into the Consent Judgment, and of their rejection by the Superior Court judge, highlights the uneasy relationship between the imperatives of consolidation and coordination fostered by health care reform and the antitrust laws’ mandate to protect competition. This tension remains unresolved by the Superior Court’s opinion and will likely remain part of the health care provider landscape for years to come. The judge in the case posed two questions: Does the Consent Judgment reasonably and adequately address the harm to competition alleged in the complaint, and is the Consent Judgment enforceable? The negative answer to both questions is founded upon the judge’s unfavorable assessment of the so-called conduct remedies embodied in the Consent Judgment. In the judge’s view, those remedies would keep in place Partners’ pre-existing market dominance and would involve the court in a lengthy and complicated regulatory oversight process. In general, conduct remedies, such as price caps and contracting restrictions, are not favored by antitrust regulators, who prefer structural remedies such as divestitures of companies that reduce the anti-competitive effects of corporate mergers. Partners’ decision to forego the South Shore Hospital acquisition might be an attempt to proactively provide this sort of structural remedy to alleviate antitrust concerns so that it might continue to pursue the Hallmark acquisition. As a matter of substance, conduct remedies do not reverse market dominance but seek to limit the impact of that dominance. As a matter of procedure, since the target of conduct remedies has incentives to act like a single integrated firm, maintaining those remedies requires ongoing and potentially complex oversight. The conduct remedies in the Consent Judgment are certainly complex. They involve two kinds of price caps, rules permitting insurers to contract with only some parts of the Partners network, a ban on contracting on behalf of unaffiliated physicians, and a cap on the growth of Partners’ physician network. All of the remedies are time-limited. The judge emphasized the complexity of the price cap remedies: They are contained in a 23-page attachment to the Consent Judgment, with 12 additional pages of examples; the opinion states that, having studied these materials, “this Court will admit quite candidly that the methodology remains a mystery to me at this point.” Moreover, whoever monitors the remedies will legal consult Peter J. Martin, Esq. Coordinated Care Versus Market Power Peter J. Martin, Esq. Continued on page 25 Frederic Baker, M.D., continued from page 22 Peter J. Martin, Esq, continued from page 23 MARCH/APRIL 2015 Worcester Medicine | 25 require the use of proprietary data provided by Partners, thus being placed “in the difficult position of playing the role or [sic] regulator in a highly complex field where the party with superior knowledge (Partners) is the very entity being regulated.” The remedies are also, in the judge’s view, ineffective at remedying the harm to competition alleged in the complaint. For example, the price caps limit increases in unit prices to an inflation rate but do not address Partners’ already “supra competitive prices” or the effect of the proposed consolidations driving patients to higher-priced Partners providers. The limit on the growth of Partners’ physician system uses a baseline that would permit Partners to grow its community physician network by one-third over five years. Partners may seek to be relieved of any provision of the Consent Judgment if a statutory or regulatory change increases its costs by more than 0.5 percent of its commercial revenue. The proposed component contracting restriction has no record of success because in the one antitrust settlement where it was used, no payer utilized it. The Partners decision is not the only instance in which courts or regulators have tried to balance the benefits of coordinated care versus the dangers of market dominance. In Idaho, a hospital acquired a physician practice as part of its efforts to create an ACO. Last year, a federal court judge required the hospital to divest itself of the practice because the combination likely would result in higher health care costs through its dominant market position. In 2011, the Federal Trade Commission and the Department of Justice jointly issued a policy statement on antitrust policy as applied to ACOs. That policy statement established an antitrust “safety zone” that is measured (simplifying greatly) as 30 percent of the market for particular services provided by two or more ACO participants. ACOs that fall outside the “safety zone” are subject to certain conduct rules concerning practices such as patient steering and exclusive contracting. Thus, both structural and conduct remedies are being applied. Health care providers can be forgiven if they are confused about the legal “rules of the road” as they head down the path of health reform. They may even be convinced that the contradictory legal mandates may doom or greatly inhibit the effectiveness of reform efforts. What they should not doubt is that they must proceed with caution. Peter J. Martin, Esquire, is a partner in the Worcester office of Bowditch & Dewey, LLP, his practice concentrating on health care and nonprofit law. health risks that are entirely preventable at costs and burdens that far exceed individual and community resources and budgets. Vaccines, like most medical interventions, carry some degree of risks, but their relative safety and overwhelming benefit is well researched and established. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, was quoted by CBS News as stating, “In fact, all the scientific data that we’ve collected over a long period of time from multiple organizations indicate that the measles vaccine is safe and all of these connections to things like autism and things like that are just not true.” A 2007 British study estimated the vaccine-attributable risk of serious neurologic disease after the first dose of MMR vaccine as 1 in 365,000 doses. The U.S. Congress acknowledged the risk of vaccination but also reaffirmed its strong bipartisan support for the sustainability of vaccinations when it enacted the National Vaccine Injury Compensation Program in the early ’80s. This federal program was created to protect vaccine manufacturers from liability through no-fault tort laws that compensate victims of alleged vaccine harm. As the CDC noted, “Vaccines are one of the greatest achievements of biomedical science and public health. Despite remarkable progress, several challenges face the U.S. vaccine-delivery system. The infrastructure of the system must be capable of successfully implementing an increasingly complex vaccination schedule.” Discussion about public health policies should always stick to the facts. As many pundits noted, vaccine safety and efficacy merits no debate. Let’s not give a platform or a pass to those who choose to distort, dismiss, deny or withhold facts, lest we undermine the great progress we have made in public health. The old saying that people are entitled to their own opinions, but not their own facts, is even more relevant in healthcare policy. We all deserve better, and we are all in this together. Frederic Baker, M.D., a Board Certified Attending Physician in Family Medicine, has a full-time outpatient practice in Holden, MA, providing comprehensive care from newborn to advanced elderly serving Central Massachusetts. He is also an Instructor in Family Medicine and Community Health, University of Massachusetts Medical School. Dr. Baker is President of the Worcester District Medical Society.