Boston-area systems split

Finding itself in a murky relationship that wasn't entirely competitive and yet not fully integrated, the Boston health system Partners HealthCare recently announced plans to end an affiliation with a smaller health system.

Partners, which operates five hospitals, including two academic medical centers, notified Northeast Health System in December 2005 that it would not renew its affiliation agreement at the end of 2006, barring major changes to the relationship.

Thomas Lee, MD, chief executive of Partners' physician network, said the possibility was left open that "if they really want to collaborate, we could do that." Otherwise, the former allies should become competitors.

Northeast Health operates two acute-care hospitals and a network of other health facilities. It has 300 affiliated physicians.

Northeast executives declined to be interviewed for this article, but CEO Stephen Laverty told the Boston Globe in January, "We are saddened by their decision." The paper said he did not rule out the possibility of negotiating to retain the affiliation.

Dr. Lee said it was a painful decision to make because "we have very good relationships with the doctors, who are caught in the middle."

Partners, which was founded by Brigham and Women's Hospital and Massachusetts General Hospital, and Northeast not only negotiated managed care contracts as a network but also pursued pay-for-performance goals together.

According to Dr. Lee, the relationship had been going well. "The problem we're having now is that we're all starting to do things where we're running up against each other that are not directly related to our contracts," he said.

For example, both sides have announced plans to build competing ambulatory surgery centers.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/02/27/bibf0227.htm.