The Proposed Atrius-Fallon Merger

Austin posted the Boston Globe story.  Some quick legal* analysis:

I predict this will pass antitrust scrutiny from both the feds and the state:

  1. While this is a large merger (about 1,100 doctors with nearly a million patients), size alone isn’t determinative.
  2. These cases are won or lost on market definition and Atrius and the Fallon Clinic are in different geographic markets:  Boston & Worcester. The vast majority of the Atrius doctors are inside I-495 and most are inside Route 128. The geographic center for Fallon is Worcester. These are distinct primary care markets.
  3. While the plans currently compete in the I-495/I-90 corridor (Framingham, Marlborough, Milford, Westborough and Harvard), this is a relatively small part of their revenues.
  4. Scale and scope efficiencies are plausible.
  5. They will play the ACO quality card.  We’ve blogged on this quite a bit.

One caveat:  if the hospitals (Partners) or health plans (BCBS-MA) strongly opposed the merger, then all bets are off.  But I don’t think Blue Cross will oppose the merger:

“We need to keep a balance of power in this state between physicians and hospitals,’’ said a senior health insurance executive who did not want to be identified to avoid antagonizing business partners.

“If we have a strong Atrius, we can keep some of the hospitals in check. I worry that too many physicians are becoming employees of hospitals. [Hospitals] are doing it because they want to control referrals — I get it — but it’s not healthy.’’

Nor is it likely that Partners will want to anger Atrius with an antitrust challenge.  

*If this were really legal advice, I’d send you a bill.


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