For Immediate Release - July 03, 2014


HPC also issues supplemental Cost Trends Report identifying cost drivers and opportunities in market trends and delivery system dynamics in the Commonwealth

BOSTON – Wednesday, July 2, 2014 – Today, the Massachusetts Health Policy Commission (HPC) issued its Preliminary Cost and Market Impact Review (CMIR) examining the proposed acquisition of Hallmark Health System by Partners HealthCare System. The HPC also released a July 2014 Supplement to the Commission’s 2013 Annual Cost Trends Report. Through robust, data-driven examinations of trends and developments in the Massachusetts health care market, both across the Commonwealth and in specific delivery systems, these reports together continue to provide transparency on health spending trends and the impacts of provider market developments in the Commonwealth.


Preliminary CMIR Report: Partners’ Acquisition of Hallmark Health

In November 2013, Partners notified the HPC of its intent to acquire Hallmark Health and its affiliates, including two acute care hospitals north of Boston, and to substantially reconfigure the way the health care is delivered in northeastern Massachusetts. The HPC has conducted an intensive, evidence-based review of the cost, quality, access, and market impacts of this transaction.

The HPC found that the proposed transaction between Partners and Hallmark is likely to increase health care spending by an estimated $15.5 million to $23 million per year for the three largest health insurers, to reinforce Partners’ market position as the provider with the highest share of inpatient and primary care services in the area, and, over time, to increase premiums for employers and consumers. While the parties have described population health management (PHM) initiatives, which have the potential to reduce total medical spending, the potential savings are unlikely to offset the projected increases to cost.

“The HPC’s findings were reached after detailed study and objective analysis of information from the parties and other market participants, in addition to publicly available data,” said Dr. Stuart Altman, HPC Chair. “I look forward to an open discussion of our robust findings, which describe the likely impacts of this transaction, which are substantial.”

The HPC released its preliminary report on Partners-Hallmark shortly after the Attorney General announced a final settlement agreement with Partners in Commonwealth of Massachusetts v. Partners HealthCare System, Inc., South Shore Health and Educational Corporation and Hallmark Health Corporation, Superior Court Civil Action No. 14-2033-BLS.

The final agreement would require the Attorney General and Partners to confer on mitigating impacts identified by the HPC in this CMIR. The findings of the preliminary CMIR report suggest, consistent with this provision, that further mitigation of the transaction’s impacts is likely warranted.

The parties now have 30 days to provide written comment on the HPC’s preliminary findings. The HPC will review those comments and release the final CMIR report and any recommendations, including whether this transaction warrants referral to the Attorney General for further review, at the next Commission meeting on September 3, 2014.

Referred to the Attorney General in February, the HPC’s Cost and Market Impact Review of Partners’ acquisitions of South Shore Hospital and Harbor Medical Associates found that those transactions would increase health care spending, likely reduce market competition, and result in increased premiums for employers and consumers; the HPC’s report provided a key evidence base for the Attorney General’s proposed settlement agreement.


Cost Trends Report: July 2014 Supplement

The HPC board also voted to issue the Cost Trends Report: July 2014 Supplement, examining additional findings related to topics discussed in the HPC’s 2013 Cost Trends Report. The supplement offers further analyses of health care spending in the Commonwealth as well as trends in the delivery system and payment methods. In its conclusion, the report offers actionable recommendations and next steps for the HPC, other state agencies, and the health care system.

The report includes findings from a groundbreaking new analysis of economic disparities in the rates of hospital admissions. It finds that residents of lower income communities are more likely to be admitted to hospitals for conditions that could have been prevented. This suggests an opportunity to improve health care outcomes, reduce costs, and increase equity through targeted community supports and improved ambulatory care. Previous HPC work found that Massachusetts spends an estimated $700M per year on preventable hospitalizations.

In its examination of post-acute and long-term care patterns, the HPC finds that Massachusetts residents are 2.1 times as likely to use post-acute care after a discharge as the national average, and Massachusetts hospitals differ greatly in their rates of discharge to nursing facilities and home health after a hospital stay. These findings point to opportunities for hospitals and post-acute care providers to identify best practices and areas for potential improvement.

The HPC’s report also includes an analysis of behavioral health trends in the Commonwealth.  The findings underscore the interconnections between behavioral and physical health conditions and the potential savings from more integrated approaches to care. The Commonwealth is already working towards incorporating behavioral health care into its work across a variety of programs. This past week, both branches of the Legislature approved a $2M appropriation for the HPC to foster programs that emphasize behavioral health through the HPC’s patient-centered medical homes certification program.

Additionally, the HPC made enhancing behavioral health care a top priority in its $60M opportunity for community hospitals in Phase 2 of the CHART Investment Program.

Supporting advancement of the HPC’s research and policy activities, the HPC today also voted unanimously to approve and promulgate 958 CMR 6.00, a regulation to implement the registration program for provider organizations (RPO). This regulation culminates a 16-month process with extensive stakeholder engagement to develop this first-in-the-nation program created by Chapter 224. RPO allows the Commonwealth a mechanism to understand, for the first time, how providers are organized, deliver care, and contract with payers.

“The HPC’s monitoring and oversight role on behalf of consumers and employers continues to advance the public conversation about how to achieve our collective goal of a health care system that provides higher quality and lower cost,” said David Seltz, HPC’s Executive Director. “I look forward to the research activities and policies that will stem from these reports and the RPO program, including next steps in making the Massachusetts health care system more efficient and effective.”



The HPC is an independent state agency that monitors reform in the health care delivery and payment systems and develops policies to reduce overall cost growth while improving the quality of patient care. To learn more, please visit or follow us on Twitter.