COMMONWEALTHOFMASSACHUSETTS

SUFFOLK,ss.

SUPERIORCOURT
CIVILACTIONNo.142033BLS2

COMMONWEALTHOFMASSACHUSETTS,

RECEIVED

Plaintiff,
V.

J A N 2 6 2 0 1 5

PARTNERSHEALTHCARESYSTEM,INC.,
etal.

SUPERIOR COURT-CIVIL
MICHAEL JOSEPH DONOVAN
CLERK / MAGISTRATE

Defendants.

NOTICEOFPOSITIONOFATTORNEYGENERALMAURAHEALEY
CONCERNINGTHEPENDINGCONSENTJUDGMENTBETWEEN
PARTNERSANDTHEOFFICEOFTHEATTORNEYGENERAL
TheCourthavinginquired,Ihereby respectfullyinformtheCourt ofmyposition onthe
proposedAmendedFinal JudgmentbyConsent ("ConsentJudgment")inthiscivilaction.
I amfamiliarwiththediligentinvestigation bytheOfficeofthe AttorneyGeneralof
Partners' proposedexpansion. IrespectAttorney GeneralCoakley'sexerciseofher
prosecutorialdiscretion,and asAttorneyGeneral, willvigorouslyenforcetheConsent
Judgment'stermsiftheSuperiorCourtenters it.
Havingnowbeensworninto office,itismy obligation,underthatoathand bystatute,to
protectandadvancethe publicinterestandto doso exercisingmyownindependentjudgment.
Withthoseobligationsinmind, IprovidetotheCourtmyviewswithrespectto thepending
ConsentJudgmentwhich wasfirstsubmittedforthisCourt'sapprovalin June2014andamended
inSeptember2014.

Asathreshold matter,Ifullyunderstandthatthe OfficeoftheAttorneyGeneral and

PartnersreachedagreementontheConsentJudgment onlyafterintensenegotiations during
whichtheOfficeassessed,amongotherthings,therisksof litigationandtheremediesthatwould
attachtosuccessful litigationascompared totheremediesof thenegotiated resolution. Iam
acutelyawarethatlitigation inherentlyisuncertain,and thatisno differenthere. Butsincethe
partiesfirstsubmittedtheConsentJudgment,theCourthasbeenpresentedwith voluminous
informationabouttheMassachusetts healthcaremarket,Partners' placeinit,andtheimpact of
Partners'expansionon thefutureoftheCommonwealth'shealthcaremarket. Numerous
stakeholdersofferedpubliccommentand raisedconcerns,includinghealthcareanalysts,
competingproviders,membersof thepublic,theHealthPolicyCommission,andthehealth
insurersthatwould directlybenefitfromtheproposedtools oftheConsent Judgment. In
reachingmyownassessmentoftheConsent Judgment,Iconsideredthose commentscarefully
and appreciatethatthepublichadthatopportunity tobeheardon amatter sosignificanttohealth
careintheCommonwealth.
Withallthatinmind,I sharewiththeCourt certainconcernswithrespectto thepotential
efficacyofthe ConsentJudgment,evenwhenitisproperlycomparedto uncertainenforcement
litigation. Foremostamongmyconcerns are:
ThetermsoftheConsentJudgmentvary indurationfromfive years(limitson
physicians)to6.5years (pricegrowthrestrictions)totenyears (component
contracting),whichraisetheconcernthatafter thosetermsexpirealbeitafter
severalyearsalarger,postexpansionPartners maywield marketleveragethatis
greaterthanitscurrent,alreadysignificantmarket leverage.
e

Becausethecommunityphysician capintheConsent JudgmentreferstoPartners'

2012levels,theConsent Judgmentpermitsmeaningful growthinthenumberof
Partners'physiciansfrom currentlevels,evenafter growthattributabletothetwo
acquisitions(SouthShoreand Hallmark).

<=

"ComponentContracting"isakeyaspectoftheConsent Judgment,designedto
mitigatePartners' marketleveragein contractnegotiationswithpayersandtoend"all
ornothing"contracting. Althoughtheremedyappearsto beauseful toolforhealth
insurers,inits comment,theMassachusettsAssociation ofHealthPlanscomprising
theveryentitiesthatwould benefitfromthisnewtooldeclinestovouchforits
utility,whichconcernsmeasto theinsurers'willingnessand abilitytoobtainthe
benefitsofthis remedy.

Inaverygeneral sense,theConsent JudgmentwouldallowPartnersto growbut

conditionsthatexpansiononthe promiseoffuturepricerestrictionsand changesto
Partners'contractingpractices. Iwouldpreferto reversethatorderofeventsand
insteadconsideranyfutureproposed Partners'expansiononlyafter Partners
demonstratesanabilitytocontributetohealthcarecostcontainment in
Massachusetts.

1alsowishtobeclear withtheCourtwithrespectto myresponseto theCourt'spotential

decision: ShouldtheCourtdeclinetoenterthe ConsentJudgment,Ifullyanticipatethatmy
Officewillexerciseits rightunderparagraph61ofthe ConsentJudgmenttovoid theOffice's
agreementwithPartners. Ianticipatewethenwouldlitigatetoenjoin Partners'proposed
acquisitionofSouthShoreHospital,and likelyuseadditionaltimeto furtherevaluatethe
proposedHallmarktransaction.
RespectfullySubmitted,

MAURAT.HEALE"
ATTCiRNEYGENE
COMMONWEALTHOFMASSACHUSETTS