Summaries of health policy coverage from major news organizations
Tufts and Partners’ Agreement Raises Premiums, But Allows HMO Members to Keep Doctors
Plan and Partners
Healthcare reached an agreement yesterday that will allow
Tufts members to stay with Partners' hospitals and doctors but
will raise premiums, the Boston Globe reports.
While no details were announced, the Globe reports
that "it is clear that the state's third-largest HMO conceded to
steep [reimbursement] rate increases to keep the powerful
provider group" (Kowalczyk, Boston Globe, 11/2).
Last week, Tufts and Partners broke off talks after three months
of negotiations. Partners said it had lost $42 million in the
past two years treating Tufts patients and asked for a 27%
increase in reimbursement rates over two years. Had no agreement
been reached, Tufts members would have lost access to Partners'
physicians and the nine hospitals in its network on April 1
(American Health Line, 10/24). Because company
premiums are already "locked in" for next year, Tufts will shift
the rise in premiums to 2002 and 2003 (Boston Globe,
11/2). Nancy Leaming, Tufts president and COO, said, "What we
did in trying to get [an agreement] is to look at restructuring
the deal to spread the incremental costs over three years"
(Powell, Boston Herald, 11/2). She added that
employers would likely accept premium increases in exchange for
maintaining their provider options. "We knew all along that a
deal with them would impact premiums. But employers want choice.
When their choices were narrowed, they were not excited," Leaming
said (Boston Globe, 11/2). Pauline Murrell, a 73-
year-old patient, agreed, saying, "[S]eniors would be willing to
pay in return for not having to change doctors or hospitals" (AP/Worcester
Telegram & Gazette, 11/2). While Tufts
compromised on the reimbursement rate issue, Partners agreed to
move toward "developing programs to improve the quality and
decrease the cost of medical care" within its provider network.
These programs could include seeing sick patients at their homes
"to reduce complications" and "encouraging the mildly ill to use
community hospitals instead of teaching hospitals," which are
typically more expensive.
While employers and consultants generally praised the
agreement, some expressed concern about what it could mean for
premiums in the future. Attorney General Thomas Reilly (D)
applauded the agreement, but said, "[T]here is no question the
terms of this contract will create additional pressures on our
health care delivery system." Paula Breslin, executive director
of the Massachusetts Healthcare Purchaser Group, noted employers'
anxiety over increased premiums and said they wanted Tufts to
create a "second, less-expensive HMO product that does not
include Partners in the network." She added that it was unfair
to people that didn't use Partners to have their rates increase
nonetheless. Other analysts predicted that the agreement would
have a significant effect on future HMO/provider negotiations.
Steven Tringale, a Boston health care consultant, said, "This is
... a deal where the fundamental principle that a hospital's
costs are actually going to get covered is probably as important
as the actual percentages. It's a principle that's catching on
in the industry" (Boston Globe, 11/2). Michael
Taylor, an employee benefits consultant with Towers Perrin,
added, "Whenever it appears to be a victory for a provider, it
emboldens other providers" (Boston Herald, 11/2).
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