More medical mergers

From the Boston Globe’s Steven Syre:

Two of the state’s largest private medical practices are in talks to merge into a giant doctor-run group that would care for nearly a million Massachusetts patients and significantly escalate the pace of health care consolidation throughout the state.

Atrius Health, which runs the Harvard Vanguard system and four other doctors practices, is in advanced talks with Fallon Clinic, the Worcester-based medical group. […]

Hospitals are also building bigger physician networks, affiliating with doctors or hiring them outright, funneling more patients to their institutions. Large physician networks at Steward, Tufts Medical Center, and the parent company of Massachusetts General Hospital and Brigham and Women’s Hospital are among the growing hospital-based doctor groups.

A combined Atrius-Fallon would be a much different kind of health organization, however, built around doctors and big enough to negotiate aggressively with hospitals on reimbursement rates and shared financial risks. […]

The consolidation of doctors and institutions also anticipates a potential sea change in health care payments, with providers receiving a fixed amount of money to care for patients, rather than collecting fees for individual procedures.

Governor Deval Patrick has submitted a health care bill that would encourage, but not mandate, such arrangements — known as accountable care organizations — in Massachusetts.

As hospital-based groups have grown larger and prepared for such a system, some insurance executives worried privately that the institutions would wield too much market power.

“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.’’

More here.

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