Partners HealthCare®

Renegotiated Contract Creates More Than $105 Million in Savings

1/18/2012

For Immediate Release: January 18, 2012

Partners HealthCare today announced that it has reached an agreement with Tufts Health Plan, which will reduce the growth in health care spending by more than $105 million over the next four years. This announcement builds on other recent contract renegotiations at Partners, bringing total savings to be passed back to consumers to $345 million over four years.

The Tufts agreement is a renegotiation of two years of an existing contract and achieves three major objectives:

1. Partners and Tufts are reducing the amount that Partners would have received by a total of $45 million over 2012 and 2013. Over the life of the four-year contract, this translates into about $105 million in total savings.
2. Partners is entering into global payments and taking on risk, as recommended by the Special Commission on Payment Reform. By entering into Tufts’ Coordinated Care Model (CCM), Partners will be required to meet or exceed quality measures for its patients and Partners will be incented to keep cost growth lower than the network average for the rest of Tufts Health Plan’s provider network.
3. Rate increases during the contract period will be held in line with general inflation, which is presently about 2 - 3 percent.

“Our patients expect that we will work with insurers, employers, and government leaders to improve the value of the health care they receive,” said Gary L. Gottlieb, MD president and CEO of Partners HealthCare. “This agreement is the latest in a series of steps that the marketplace has taken to begin to deliver that value.”

This agreement is possible as the result of sweeping initiatives that Dr. Gottlieb put into place to redesign the delivery of care at Partners to both improve quality and reduce costs. The initiative initially targeted five high cost conditions including diabetes, colon cancer and stroke. Partners strategic plan also places a heavy emphasis on making the Partners system less costly by examining where savings could be realized in hospitals and institutions without affecting patient care.

In October, Partners announced that it had renegotiated an existing contract with Blue Cross Blue Shield of Massachusetts, which delivered $240 million in savings for consumers over a three year period. That agreement also entered Partners into a global payment and risk sharing arrangement with that insurer.

Last month, Partners was selected as one of just 32 health care providers in the nation as a Pioneer Accountable Care Organization (ACO). The initiative, sponsored by the Centers for Medicare & Medicaid Services (CMS) Innovation Center, aims to transform the way that health care is delivered by providing Medicare patients with higher quality, while slowing cost growth through enhanced care coordination.

“The Massachusetts marketplace is rapidly transforming into one that ensures better value for our patients,” said Gottlieb. “Massachusetts can and should serve as a model for the rest of the country on cost control as we are on improving quality and access to health care.”

Partners HealthCare is an integrated health care system, founded by Brigham and Women’s Hospital and Massachusetts General Hospital that offers patients a continuum of coordinated and high-quality care. In addition to its two academic medical centers, Partners includes community and specialty hospitals, a physician network, community health centers, home health and long-term care services, and other health care entities. Partners HealthCare is committed to patient care, research, teaching, and service to the community. Partners is one of the nation’s leading biomedical research organizations and is a principal teaching affiliate of Harvard Medical School. Partners HealthCare is a non-profit organization.