A large healthcare company planning to buy a nationwide network of doctors from financially troubled hospital operator Steward Health Care is facing criticism from Massachusetts lawmakers who are asking for a careful examination of the deal.
State healthcare officials have been informed about the proposed sale of Stewardship Health Inc. and the affiliated Steward Health Care Network to OptumCare, a part of UnitedHealth Group.
Stewardship Health Inc. is the parent company of Stewardship Health Medical Group Inc., which employs primary care doctors and other medical professionals in nine states, according to the state Health Policy Commission.
U.S. Rep. Jake Auchincloss expressed immediate concerns about the proposal, which he termed “alarming,” in a statement Wednesday morning after the development was revealed Tuesday evening.
“Steward’s doctor-led practices provide crucial medical care to Greater Fall River & Greater Taunton and should continue to operate,” Auchincloss said. “But the possibility of UnitedHealth Group acquiring Stewardship Health is alarming. UnitedHealth, a major corporation already under federal antitrust investigation, has spent five decades turning healthcare into a business to the disadvantage of patients and doctors.
“My constituents in southeastern Massachusetts should not be next in line,” he added.
Steward’s dire financial situation, which came to light earlier this year, continues to cause problems for Massachusetts hospitals and patients, some of whom live in the state’s poorest communities.
The Dallas-based company – the third largest hospital system in Massachusetts – acknowledged being millions in debt in rent, with unpaid contracts and other expenses in January. After pressure from state leaders, the company began considering selling off all their hospitals in the Commonwealth, but the fate of all nine hospitals remains uncertain.
But UnitedHealth is also facing its own issues. The Wall Street Journal reported late last month that the country’s biggest private health insurer is being sued by a California-based nonprofit group of hospitals and doctors for allegedly using its market power to try to prevent them from competing for primary care physicians.
The Department of Justice is investigating the healthcare conglomerate over antitrust concerns.
U.S. Sen. Ed Markey, holding a news conference at the John F. Kennedy Federal Building Wednesday afternoon, emphasized the potential “significant consequences” if Steward’s sale to UnitedHealth is completed.
Markey will be leading a hearing that will “examine” the role of for-profit companies in the country’s healthcare system next Wednesday in Boston.
The sale could result in “an increase in costs, a reduction in services, but it could also mean that Optum, UnitedHealthcare, as it comes in to buy these doctor networks, also lures away doctors who currently work at community health centers, further weakening the healthcare services for the poorest in our state,” Markey said.
Before the sale can be finalized, the Health Policy Commission must examine the proposal.
The commission cannot stop a transaction but can send findings to the state Attorney General’s office, the Department of Public Health, or other Massachusetts agencies for potential further action.
Papers submitted to the state did not list a price for the transaction. Under the agreement, Optum would buy a Steward affiliate that includes the company’s main care doctors and other medical professionals in nine states.
Deals involving the sale of Steward’s eight Massachusetts hospitals would also need to be reviewed by the agency, and examined by the Determination of Need program at the Department of Public Health.
HPC Director David Seltz said, “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.”
After all necessary information about the sale has been provided, the HPC will have 30 days to assess potential impacts of the transaction, according to the agency. If the sale is expected to have a significant impact on health care costs and market functioning, the HPC can start a full Cost and Market Impact Review, an option that it has often not pursued in the past.
House Speaker Ron Mariano thinks 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.
