Healthcare consolidation under state, federal scrutiny

Partners HealthCare System's bid to acquire South Shore Hospital in Massachusetts has drawn the attention of state and federal regulators, The Boston Globe reported.

Both investigators from the U.S. Justice Department and the Massachusetts Attorney General's office have spoken with senior executives with three hospital systems that compete with Boston-based Partners, as well as a regional payer.

Although Partners officials say the probe is a routine review prior to a merger, industry observers note the increasing number of such transactions across the country are drawing greater regulatory scrutiny, the Globe reported.

"Healthcare has been a top priority of (the Justice Department and the Federal Trade Commission) for the last four or five years,'' David Marx, an antitrust attorney with McDermott, Will & Emery in Chicago, told the newspaper. "There's a concern when competing providers merge that it could enable them to raise prices.''

In California, state regulators are undertaking a similar probe, focusing on the northern part of the state, where more chains predominate and prices tend to be higher, according to the Sacramento Bee.

Despite price concerns, some healthcare experts say provisions in the health reform law promotes partnerships among health systems, hospitals and physicians to streamline care, the article noted.

For more:
- read the Globe article
- here's the Sacramento Bee article