Partners HealthCare System Inc. is in talks to acquire South Shore Hospital in Weymouth, one of the largest remaining independent hospitals in the Boston area, in a deal that would reshape the competitive landscape in the region’s health care market, according to two health care professionals who have been briefed by the parties on the negotiations.
The 318-bed regional hospital serves a swath of southeastern Massachusetts stretching from Quincy to Taunton to Cape Cod. Representatives from both organizations acknowledged Wednesday that they are discussing ways to expand a clinical alliance between South Shore and Partners-owned Brigham and Women’s Hospital, but would not confirm they are talking about a full merger under which the Weymouth hospital would become part of the Boston-based Partners system.
“We’re in discussions with South Shore Hospital about enhancing and strengthening their existing affiliation with the Brigham,” said Partners vice president Rich Copp. Under that arrangement, the Boston hospital offers surgical, cardiovascular, cancer, and women’s health services to South Shore patients.
Sarah Darcy, spokeswoman for South Shore Hospital, said the 90-year-old institution entered into talks with Partners and Brigham and Women’s as it looks toward a future in which health care providers will be larger and insurers give providers fixed payments for patient care rather than reimbursements for each visit and procedure.
“We’re really in a very exploratory stage right now,” Darcy said. “We’re talking about how best to work together on improving health care availability, accessibility, and affordability. The goal is a more comprehensive and integrated approach for our patients.”
Partners, the largest hospital and physicians organization in Massachusetts, has kept largely on the sidelines during a wave of consolidation that has swept through the state’s health care industry over the past 18 months. The mergers leave fewer competitors, but also have resulted in better coordinated health care, with smaller community hospitals referring more complex procedures to their affiliated academic medical centers.
One factor inhibiting Partners has been the scrutiny of regulators in the office of state Attorney General Martha Coakley, who has identified Partners hospitals as among Massachusetts’ highest paid at a time when the government is working to rein in costs.
In February, however, officials at Partners signaled their eagerness to resume growing when their largest hospital, Massachusetts General in Boston, said it was negotiating a merger with Cooley Dickinson Hospital in Northampton, a move that would extend the reach of Partners beyond eastern Massachusetts. Partners executives have already notified Coakley’s office of their newest expansion plans and are determined to press forward, despite receiving no assurances the office would approve the acquisition of South Shore Hospital, said the industry professionals who were briefed.
Brad Puffer, a spokesman for Coakley’s office, declined to discuss whether Partners contacted the office or how the state might react to the system enlarging its footprint.
In addition to Massachusetts General and Brigham and Women’s, Partners owns Faulkner Hospital in Boston, McLean Hospital in Belmont, Newton Wellesley Hospital, and North Shore Medical Center in Salem. It has not acquired a community hospital since 2006, when Martha’s Vineyard Hospital and Nantucket Cottage Hospital joined the Boston-based system.
During that time, for-profit Steward Health Care System LLC has emerged as a growing force in the marketplace, buying 10 community hospitals in eastern Massachusetts. Among other consolidation deals, Beth Israel Deaconess Medical Center in Boston has taken over Milton Hospital, while Lahey Clinic of Burlington merged with Northeast Health System of Beverly.
New ownership at Milton and at nearly Quincy Medical Center, snapped up by Steward, have intensified competitive pressure on South Shore Hospital. Its size and location, just 15 miles south of Boston, make it attractive to major Boston teaching hospitals seeking to direct more routine care to lower-cost facilities.
“In this new health care economy, there isn’t an academic medical center that isn’t exploring opportunities to align with community-based hospitals as they prepare to take unnecessary costs out of the system,” said Newton health care consultant Ellen Lutch Bender.
Partners officials have argued privately that their acquisition of Cooley Dickinson would boost competition in western Massachusetts where Springfield’s Bay State Medical Center—which bid unsuccessfully for the Northamption hospital—dominates the market.
Similarly, Partners has a smaller presence south of Boston than in the northern and western suburbs, while Beth Israel Deaconess and Steward are expanding on the South Shore. Partners officials believe the rapid growth of Steward, in particular, strengthens their contention that state officials should permit them to expand, according to the health care professionals briefed on the health care system’s plans.
In the meantime, South Shore Hospital is growing, with plans to add 60 beds at its South Weymouth campus by the end of the year.
The hospital draws 82,000 emergency visits annually, has 3,800 employees and 900 affiliated and employed doctors. In 2008, it won approval from the state Department of Public Health to operate the only licensed trauma center in southeastern Massachusetts.
“We’ve been here since 1922,” Darcy said. “Our mission is healing, caring and comforting. And that will never change.”