Nine months after scooping up 150 doctors from Beth Israel Deaconess Medical Center’s physician group, fast-growing Steward Health Care System has lured away more than 110 other health care providers affiliated with the giant Partners HealthCare System.
Hawthorn Medical Associates, the largest multi-specialty practice in the New Bedford area, disclosed Wednesday that it has signed a 10-year affiliation deal with Steward, a Boston-based chain of 11 hospitals and other medical care facilities across eastern Massachusetts.
The agreement takes effect Jan 1. At the end of this year, Hawthorn will let its 14-year affiliation with Partners Community Healthcare, the chain’s physician network, expire. Hawthorn doctors will be covered by insurance contracts negotiated by Steward Health Care Network, many of them so-called global contracts that put providers on annual budgets for delivering care and reward them financially for better results that come in under budget.
For-profit Steward, backed by New York private equity firm Cerberus Capital Management, has been aggressively wooing doctors practices in the communities where it operates.
After signing a deal last November with the Whittier Independent Practice Association in Newburyport, which had been affiliated with the Beth Israel Deaconess group, Steward said in December that it was partnering with Compass Medical, a South Shore practice with 90 doctors that had been allied with the Partners network. Also, a half dozen doctors in the Quincy area recently left Tufts Medical Center’s physician network for Steward.
“Doctors are always in demand because they refer patients to hospitals,” said Ruselle W. Robinsoncq, health care attorney for Boston law firm Posternak Blankstein & Lund. “Because everyone is moving to some kind of bundled payment... you’re moving toward an integrated care model where doctors and hospitals will be paid as a single entity and will have to work more closely together.”
The relationship with Hawthorn will bring the number of doctors in Steward’s network to about 2,700, including 700 employed and 2,000 affiliated physicians.
James J. Guralekcq, chief executive of Dartmouth-based Hawthorn, said its decision was driven less by financial incentives than by a conviction that linking with Steward would better position the practice for an emerging era of more coordinated health care. Steward has a bigger presence in the New Bedford area than Partners. Guralek said the deal was approved unanimously by the 60 physicians who are shareholders of Hawthorn, an organization that also includes other doctors, physician assistants, and nurse practitioners.
“It’s a preparation for what’s happening in health care,” Guralek said. “Unless we’re with a system that will allow us to develop health care in our community, we’re just going to be pawns in a larger game” involving more stringent state and federal regulations and funding cuts. “We’re looking for someone who has an investment in the local community, and Steward has that.”
Among its other holdings, Steward owns Saint Anne’s Hospital in Fall River, where many Hawthorn providers already refer patients. Partners—the state’s largest health care and physicians group and the owner of Harvard-affiliated Massachusetts General and Brigham and Women’s hospitals in Boston—doesn’t run any hospitals along the state’s South Coast where Hawthorn operates.
“We’ve had a great affiliation with Partners,” Gularek said. “I can’t say enough good things about them. And we look forward to the next 10 years with Steward.”
Steward executive vice president Mark Girardcq, who heads its physicians network, said the arrangement with Hawthorn is consistent with Steward’s “community care model,” which involves treating more patients locally rather than sending them to Boston hospitals for routine care, and offering more treatment in doctors’ offices and home settings when possible. Girard, however, said Steward would not restrict Hawthorn doctors from referring patients to other hospitals, such as rival St. Luke’s Hospital in New Bedford, or to Boston medical centers.
“Hawthorn is a world-class provider of quality care,” Girard said. “And they, like us, want to keep care local when it’s appropriate. We know that a lot of care is leaving the community and going to high-cost centers like Boston.”
Girard said Steward does not consider itself a Partners competitor. Noting that Steward hospitals themselves refer many patients to the Boston organization’s hospitals for some complex care, he said, “We’re actually a complement to Partners.”
Partners vice president Rich Coppcq said the Steward alliance with Hawthorn is evidence of how the health care business is changing. Copp noted that Partners operates its own community hospitals in the state, though none in the South Coast area.
“We’re disappointed to part company with Hawthorn, but we also see that this is the marketplace evolving,” Copp said. “Providers and others are developing new models of care that keep care in the community, and that’s something Partners is concerned with, too.”
St. Luke’s parent organization, Southcoast Health System, released a statement from its chief executive, Keith A. Hovancq, who had lost out to Steward last year in competitive bidding for nearby Morton Hospital and Medical Center in Taunton.
“We hope to have a continued collaborative relationship with Hawthorn Medical Associates, keeping the best interest of all patients and the community at the forefront, while continuing to provide the highest quality of care to the region,” Hovan said.