Steward-Optum Deal Raises Concerns for Mass Health Policy Commission

TL/DR –

The Massachusetts Policy Commission is evaluating the proposed sale of Steward Health Care’s physician network, Stewardship Health, to UnitedHealth Group’s Optum. The potential sale, part of Steward Health Care’s recovery plan amidst financial troubles, is complex and could impact many community hospitals and patients. The sale is subject to review by state and federal antitrust authorities and has drawn criticism from state officials and congressional delegation who fear it could further increase UnitedHealth’s market dominance.

The Proposal of Steward Health Care’s Physician Network Sale

The Massachusetts Policy Commission board is currently assessing the proposed sale of Steward Health Care’s physician network to UnitedHealth Group’s Optum. The complexities of the sale have raised concerns for patients and small community hospitals. This topic was discussed at a recent meeting, highlighting its potential harmful impact.

Stewardship Health’s Potential Sale to Optum

Stewardship Health potentially would be sold to Optum. The Steward group, under strain due to financial difficulties, employs 2,950 physicians and is the third-largest physician network in Massachusetts. Increased monitoring of Steward Health Care by Massachusetts state officials is ongoing.

Optum’s Influence in Massachusetts

Optum already manages roughly 975 physicians in Massachusetts, encompassing two physician practices and nine urgent care centers. Additionally, UnitedHealth’s consistent expansion strategy means it employs or is affiliated with 10% of all U.S. physicians and hired 20,000 doctors last year alone.

Implications of the Sale

This proposed move will affect Stewardship Health physicians and the connection between them and Steward’s hospitals. To ensure transparency, a thorough review by state and federal antitrust authorities is required. The review process is in early stages, and the Steward system has not yet provided a complete notice of material change. Upon receiving this information, a 30-day preliminary review period will commence.

Effects of Private Equity in the Healthcare System

Given the financial struggles associated with Steward Health Care and the proposed sale to Optum, there is increasing concern about the influence of private equity in the health care system. Lawmakers are considering more stringent regulations on private equity investments. Private equity firms typically aim to increase the value of the companies they acquire and sell them for profit within a few years, a strategy that can introduce instability to the health care market. A recent special hearing further discussed this issue.

Private Equity’s Effect on Health Care Costs and Quality

Private equity acquisitions often result in higher prices and are linked with increased utilization and potentially lower quality of care. The Massachusetts Health Policy Commission is working on a white paper that will encapsulate their research and policy considerations. The commission recently voted to maintain the state’s health care cost growth benchmark at 3.6%.

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