Mutual self-interest leads to antitrust concerns

Paul Levy | Not Running a Hospital | August 27, 2015

We have a bright new Attorney General here in Massachusetts who has already earned her bona fides with regard to putting the brakes on economically unsupported market power expansion by the local dominant provider network.  That corporation, Partners Healthcare System (PHS), has now indicated that its primary expansion activities will be outside of the United States, but that statement hides a bit of misdirection.  Indeed, PHS remains focused on maintaining its hold on physician organizations and its overall market share here in the state.

It is on this front that the provider group is engaged in a relationship with one of the country's largest electronic health record companies, Epic.  And it is here that the Attorney General should rejoin the antitrust battle--not only in Massachusetts on her own--but in cooperation with Attorneys General in other states.  The target, though, should not be the provider groups per se, but rather the EHR corporation.

What we are seeing here is a remarkable reinforcement of mutual self-interest in the behavioral patterns of the two entities. Here's how it works.  Partners enters into a contract with Epic for the construction of an EHR for its facilities.  The two organizations go to the Partners-affiliated, but independent, medical practice groups and tell them that they have to install the Epic EHR--even if the EHR they have had for years is perfectly adequate for their purposes.  If a doctors' practice asks why they can't keep their old system, Epic makes clear that interoperability between its system and the practice's legacy system is not feasible.  Meanwhile, to clinch the conversion, Partners also informs the local practices that failure to install the Epic system will foreclose those practices from participating in the favorable insurance contracting relationships it enjoys.