Partners planning reduction of costs

Health care president stresses affordability

The state’s largest health care system says it will redesign care for thousands of patients and reduce administrative costs as part of a major new initiative intended in part to make treatment at its teaching hospitals more affordable.

Partners HealthCare, a physician and hospital organization that includes Massachusetts General and Brigham and Women’s hospitals, also plans to launch a “public education campaign’’ early next year to improve its image, which has taken a pounding this year in the debate over soaring health care costs.

Dr. Gary Gottlieb, Partners’ president, has been introducing the initiative in a speech called “The Case for Change’’ to board members, executives and physician leaders at the organization’s nine hospitals. He has told managers that Partners needs to go more on the offensive in telling its story, and to figure out “when it’s right’’ to use care and “not just be driven by the transaction and demand for care in a given moment.’’

In a recent interview, Gottlieb said that it’s too soon to say how much expense Partners will cut from its system. But, he said, his intention is for the system to become far more affordable over the next one to two years by reducing the cost of services as well as the amount of services provided — while not harming patient care, research, and training programs for new doctors.

“We’re running a health care system that has as its driving mission to bring the best and brightest to care for the sickest. If that’s crowding out society’s ability to pay for firefighters, that’s not OK with us,’’ said Gottlieb, adding that Partners “clearly has to step up the intensity’’ of its cost-control efforts.

So far, Partners has decided to redesign care for patients with colon cancer, strokes, cardiovascular disease, and diabetes, aiming to lower the cost and improve the quality of treatment. Teams of doctors and executives are analyzing current care for these patients, including which steps are associated with the best results, and the extent of wasteful care, such as duplicative imaging tests, preventable readmissions to the hospital, and medical errors that lead to more care. The teams must develop plans by January.

Even though Partners has not made public other details, Andrew Dreyfus, the president and chief executive officer of Blue Cross Blue Shield of Massachusetts, said “this is an important statement from the state’s largest health care delivery system, that affordability has to be a central challenge for the health care community.’’

The question, he said, is whether the results will give the community what it needs, which is to reduce health care inflation close to the rate of overall inflation. Achieving that would slow growth in health insurance premiums. Medical spending has been growing two to three times faster than services as a whole.

In Massachusetts, health care spending has risen 7.5 percent annually, and some state officials and health care executives blame Partners and other powerful providers with market clout.

In a report released last winter, Attorney General Martha Coakley found that Massachusetts insurance companies pay certain hospitals and doctors twice as much money as others for essentially the same patient care. Her investigation found no evidence that the higher pay was a reward for better-quality work or for treating sicker patients.

Several months later, Partners hired its own consultant — former state public health official Paul Dreyer — who disputed the attorney general’s findings, saying that health care costs have soared in Massachusetts because hospitals have spent money on programs and equipment that have improved quality and reduced mortality.

Still, Partners executives have acknowledged that the organization is too costly.

As are other providers, Partners is under pressure to prepare for a new payment system that will essentially put doctors and hospitals on a budget, said Dr. Thomas Lee, head of Partners’ physician organization.

Over the next few years, insurers and government programs are expected to start paying providers a flat fee for treating a patient for a particular episode, or for caring for a patient during a particular time period — rather than paying for each test, procedure, and appointment.

Nancy Turnbull, a dean at the Harvard School of Public Health, applauded Partners for focusing on controlling costs, but said it’s important that the “savings aren’t just retained as profits.’’

“The link between their cost and what they actually get paid is critical,’’ she said. “If they reduce cost and that enables them to [lower] what they charge, that’s good for everyone.’’

Liz Kowalczyk can be reached at

Correction: Because of a reporting error, an earlier version of this story gave an incorrect title for Andrew Dreyfus, the president and chief executive officer of Blue Cross Blue Shield of Massachusetts. 

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