Hospital deals can benefit physicians, too

Better HMO contracts for hospitals mean better pay for some doctors, as the example of Partners HealthCare in Massachusetts shows.

By Cheryl Jackson, AMNews staff. Oct. 15, 2001.

A tactic that hospitals have used recently to perk up their bottom lines might be helping physicians financially as well.

Hospitals' threats to walk away from plans that don't pay better have produced more lucrative agreements for some of the physicians affiliated with them, analysts say.

A case in point is Boston's Partners HealthCare System Inc. Partners Community HealthCare Inc. is part of the system and includes about 4,000 physicians looking after about 1.5 million patients.

When the health system stood up to the three largest payers in the area -- Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Health Care and Tufts Health Plan -- only Tufts didn't go for a more favorable contract. Partners had said it would drop those plans that continued to reimburse less than costs.

"Our policy going into each negotiation was we're really not able to enter into contracts where we lost money anymore," Partners spokeswoman Jennifer Watson said. "We knew we needed better rates for the hospitals so they wouldn't be losing money anymore, and we needed better rates for doctors so they wouldn't be losing money any more."

After the negotiations stalled, Partners in October 2000 notified Tufts that it would stop taking the insurance in April 2001. Tufts came around; the two sides signed a deal. Tufts would not comment on the negotiations. [...]