THE HEALTH POLICY COMMISSION’S review of Steward Health Care’s proposed sale of its national physician group to Optum should be differently focused from prior reviews, such as when Mass General Brigham sought to buy South Shore and Hallmark hospitals or the merger of Beth Israel and Lahey Health.

It’s not that Optum’s market share for physician services, its likely pricing, or resultant total medical expenditures should be avoided. It’s just that there are also some other very pressing matters that are fundamentally different for this proposed transaction. Some of the issues arise because of who the seller is and some are tied to worries about this particular buyer. Worries about both parties were certainly on display Wednesday at the hearing on Steward led by Sens. Edward Markey and Elizabeth Warren.

The Health Policy Commission’s role is to thoroughly examine this transaction, and flag for Attorney General Andrea Campbell if there are any substantial harms to Massachusetts residents or the state’s health care system.

Here are some issues that need to be addressed:

  • As a threshold matter, the Health Policy Commission needs to learn more about what in Massachusetts exactly is being sold. How many clinicians are involved? What is their employment or affiliation status with Steward? And how many patients would be affected by this proposed purchase? We need details about the sales price and how those proceeds will be used, particularly the proceeds from the Massachusetts physicians. The money for the Massachusetts assets should be retained in the state to help pay the cost of Steward’s operating hospitals here. The commission should also find out if there is a plan for any additional payouts to Steward executives or for money flowing out-of-state.
  • Stewardship Health clinicians in Massachusetts are owed money by Steward for contractually promised payments that date back to 2021. The commission should find out if there is a plan to pay those clinicians before or immediately after the deal closes. Fairness demands that those payments should not be conditioned on Stewardship Health doctors having to sign on with Optum going forward. For some or even many in that group, this should be a time where they have a choice to opt-out rather than opt-in with Optum. 
  • Perhaps the main question to explore is what sort of impacts (financial, operational, or other) if any will come the way of Steward hospitals after the physician group sale. Steward is supposedly out shopping these hospitals right now, so there is legitimate worry that a potential hospital sale to someone else could be thwarted if the physician group changes hands in a way that is harmful to the operational prospects of one or more of the hospitals. The state has a vital interest in maintaining adequate inpatient capacity right now, especially in certain geographic areas like the region south between Boston and Brockton. So clearly any untoward impacts from the sale of Stewardship Health on current or future hospital viability for the Steward hospitals should be a big concern—and possibly a deal killer. 
  • If Optum is allowed to add the Steward group of physicians to its Reliant and Atrius portfolio, could this impact not only their pricing behavior but also lead to new hospital affiliations for the Optum-owned physician group or new Optum services such as infusion, imaging, or outpatient pharmacy? Most of those services are currently done at hospitals, so an Optum incursion into this area could take revenues away from hospitals owned by Steward or others.
  • Is there any reason to think that a sale to Optum could impact, either positively or negatively, investments in mental health and addiction service providers connected to the medical group?
  • The Health Policy Commission may also wish to explore whether a purchase by Optum could lead its corporate parent, United Healthcare, to expand its health insurance business in Massachusetts. Some may see this positively as adding to competition, others may see it as taking market share away from primarily non-profit insurance providers who are almost always at the top of national health insurance company rankings. 

Some of the issues and information noted here are of such importance that perhaps the Health Policy Commission, if it chooses, can assert its leverage to essentially put this sale transaction review on hold to give its review more time. It could do so by identifying the Steward filing as “incomplete” until it receives sufficient information about the transaction related to the above issues.  

But assuming at some point it receives sufficient information so that it can complete its review, the commission will have to decide whether to refer the matter to Campbell for possible legal action.

If that happens, Campbell may want to use this proposed transaction as the opportunity to breathe some new life into the state’s consumer protection laws—something her predecessors were reluctant to do. I’m a supporter of the Legislature explicitly giving some additional consumer protection powers to the attorney general in the health care market transaction context. House Speaker Ron Mariano pushed for such a change in the law several years ago, but the Senate didn’t go along.

Even without any new statute on the books, Campbell and her staff should not be paralyzed by the notion that the consumer protection laws in a health care market transaction context are essentially only extensions of antitrust law—a view that seems to have dominated prior thinking at the attorney general’s office over the years. It may be that the Optum sale wouldn’t violate antitrust laws, but that shouldn’t stop Campbell from trying to make the case that it does violate the state consumer protection statute.  

The fact that this sale may be going forward in other states where Steward has physicians should not deter Campbell from moving forward with this sort of expression of “Massachusetts exceptionalism.”

Who knows how Steward and Optum may react to such a decision on her part to prosecute a consumer protection violation from the proposed sale? At the very least, such a challenge could bog down the physician group sale in Massachusetts for months. Quite possibly the strong desire of Steward and Optum to see the sale go forward in our state could make them quite amenable to agreeing to a set of strict conditions that would be worth fighting for in order to mitigate some of the harms noted above. 

It would certainly be better if the Legislature had granted the Health Policy Commission and the attorney general more authority for stopping or greatly modifying the physician sale transaction that is on the table now. But neither agency should feel powerless. In fact, if they are willing to act at the top of their regulatory license, we may well get the result we need to better protect the Commonwealth from additional harms. 

Paul A. Hattis is a senior fellow at the Lown Institute.