WITH THE SALES of Steward Health Care’s Massachusetts hospitals targeted to close in less than two weeks, state health regulators emphasized Thursday they are under a particularly compressed timeline to review the transactions — since their analyses, which have no binding impacts, typically span weeks or months.
The Health Policy Commission has more time to assess the proposed sale of Steward’s physician network to the subsidiary of a private equity firm, and board members pressed for greater scrutiny to understand the firm’s long-term plan for its Massachusetts operations.
HPC staff signaled they are bogged down reviewing the material change notices they received this month for Steward hospitals, which call for Lifespan to buy St. Anne’s Hospital in Fall River and Morton Hospital in Taunton; for Lawrence General Hospital to acquire Holy Family Hospital with campuses in Methuen and Haverhill; and for Boston Medical Center to take over St. Elizabeth’s Medical Center in Brighton and Good Samaritan Medical Center in Brockton.
“We understand that the hospitals are hoping for a closing date of September 30, and we are reviewing these [material change notices] as expeditiously as possible with that date in mind,” Megan Wulff, the HPC’s director of market oversight and monitoring, said.
Regulators must weigh how the proposed hospital sales will impact health care costs, quality, and access. The HPC conducts its preliminary reviews within 30 days of receiving completed notices, and officials can choose to pursue more in-depth reviews that may span six months.
The HPC lacks the authority to approve or block transactions, though reviews can help guide the work of other state and federal regulatory agencies, said Kate Mills, the HPC’s senior director for market oversight and transparency.
“Even without a full cost and market impact review, or CMIR, the material change notice review process is itself quite a powerful tool,” Mills said. “With the extensive data and analytic resources that are available to the HPC, we can actually do quite a lot to assess the potential impacts of a given transaction, even in a relatively short time frame. So I did want to just reassure our commissioners, we are very much hard at work on all of these analyses, even with the somewhat short time frames.”
Along with the HPC reviews, the Department of Public Health is also currently handling emergency determination of need applications for the Steward hospitals, Mills said.
HPC executive director David Seltz described this period as the busiest stretch so far at the agency, which on Thursday marked its 300th meeting.
“We have more transactions before us at this particular moment than we have ever had in all of those 300 meetings in the 12 years of the HPC,” Seltz said. “But we have the right team, and we have the right experts that we have brought on board to be able to do this, and we need to be able to meet this moment as well because there are a lot of questions, and the public is rightly trying to understand what the future will be here.”
HPC Commissioner Alecia McGregor asked agency staff to explain what would happen if a “red flag” comes up during the review process. Mills responded that all agency findings will be reported to HPC leaders and commissioners.
“So if we encountered a red flag, you would hear about it from us, and then it would be part of the decision-making process as to whether or not a cost and market impact review would be warranted,” said Mills, who predicted staff will have findings “very soon.”
The material change notices to the HPC, which are largely similar across the Steward hospitals, state the new owners will preserve access to essential care. For the Holy Family facilities, the notice says the acquisition will “improve patient outcomes through the development of innovative care coordination between hospitals and other care providers in the Merrimack Valley.”
Lifespan, Lawrence General and BMC in their notices have indicated they plan to continue the employment of certain physicians, the HPC said.
Commissioners peppered agency staff with questions about the proposed sale of Stewardship Health, the company’s physician network, to Brady Health Buyers LLC, which the HPC described as an affiliate of Rural Healthcare Group and a subsidiary of Kinderhook Industries.
HPC said the Steward Health Care Network, which is part of Stewardship, is the “third largest-physician contracting network in Massachusetts” with about 2,950 physicians.
The deal has a targeted closing date of October 30, and commissioners are seeking more information about the types of employees that could be protected — including support personnel at physician practices — under the arrangement. Commissioners are also interested in evaluating Kinderhook’s track record and how the company can be held accountable, if necessary, in the future.
“One of the things that I’m concerned about, and frankly very nervous about, is that even though the remaining Steward hospitals will be in the hands of nonprofit operators — that’s encouraging — we’re still looking at a for-profit acquisition of the physician group,” McGregor, an assistant professor at the Harvard T.H. Chan School of Public Health, said. “And I want to know, what are the ways that we can hold them accountable for doing right by patients, doing right by the people of the Commonwealth? What are the ways that we’ll be able to do that over time, in the absence of oversight legislation which hasn’t been passed yet?”
Wulff responded that the firms will be subject to HPC reporting requirements once they become providers in Massachusetts, and that regulators would analyze their spending through the agency’s performance review process. Board chair Deborah Devaux added that leaders from Rural Health Group and Kinderhook have “indicated their interest in understanding our expectations of them.”
Commissioner Barbara Blakeney urged HPC staff to explore Kinderhook’s history “very aggressively.”
“Past is prelude to future, and it would be helpful to know of their past history in terms of acquiring, especially health care organizations, and tracking the history of what happens during the time of that acquisition,” Blakeney, past president of the American Nurses Association, said.
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