BOSTON — October 24, 2000 — The physicians and hospitals of Partners HealthCare, including Massachusetts General and Brigham and Women’s hospitals, have regretfully notified the Tufts HMO that they will not be able to continue to participate in the insurance plan as of April 1, 2001. The doctors and hospitals reached this difficult decision after months of negotiations with Tufts failed to produce agreement on a new contract which would adequately cover inflation and basic increases in the cost of patient care.

The key issue in the negotiations was reversing chronic shortfalls in the amount Tufts reimburses the doctors and the hospitals for the care they provide.

• Hospital and physician HMO losses on the Tufts contract totaled $42 million in just two years. The hospitals ran a 1999 deficit of 17% on the contract.

• Physicians have not seen their Tufts fees increase in five years. These fees cover all the costs of running a physician’s practice, including professional staff, office expenses and medical supplies.

• During that time, inflation and the cost of providing care have risen 13%. New and better medical treatments have been introduced, but reimbursements have not kept pace.

"Both sides tried hard over many months to get to ‘yes’, but unfortunately we were not able to reach an agreement. We very much regret that our talks were not successful, but the financial pressures on physicians and hospitals today are such that we can no longer participate in contracts that don’t cover the cost of care," said Peter Slavin, MD, head of the Massachusetts General Physicians Organization.

"We apologize to our patients for the disruption, and will do whatever we can to assist them during this transition phase," added Troyen Brennan, MD, head of the Brigham and Women’s Hospital Physician Organization, emphasizing that the Partners physicians hope to continue caring for their current Tufts patients who change to other insurance plans.

One reason for the timing of the decision was to give patients a full five months to change to one of the many insurance plans that will still be accepted by the Partners physicians (see attached list) or to make arrangements to change physicians before the April 1 deadline.

The physicians and hospitals which have notified Tufts that they will not be able to continue participating in the plan are: Massachusetts General, Brigham and Women’s, The North Shore Medical Center, Newton-Wellesley, Faulkner, Spaulding Rehabilitation, and the community-based doctors and hospitals of Partners Community HealthCare, including Emerson, Beverly and Addison Gilbert hospitals. The decision involves only the Tufts HMO plan and some Point of Service patients. Members of Secure Horizons are not affected.

It is important to note that steps have been taken to ensure that patients in an ongoing course of treatment (such as chemotherapy or the last stages of pregnancy, for example) who need to continue to see their current physician will continue to receive care and that the care will continue to be covered by Tufts, as provided for under the terms of the current contract with the HMO.

To provide patients with as much information as possible, each patient will receive a letter outlining the decision and options for continuing care. Similar letters are being sent to physicians who refer Tufts patients to Partners physicians, as well as to employers who offer Tufts. The timing of the decision allows employers to offer a benefits enrollment period so their employees can switch from Tufts to a plan accepted by the Partners physicians and hospitals well before the April 1 deadline. A special web site (www.partners.org/tufts) and telephone call center (1-800-554-9545) have also been established to provide additional information to patients and their employers.

In explaining the decision, Thomas Lee, MD, Medical Director of Partners Community HealthCare, stressed that, "Physicians throughout our network are under financial pressure from all sides, and as a result, can no longer participate in agreements on which we lose money year after year. We are concerned about the impact on patient care of the constant pressure to do more and more without the resources to pay for it. We simply can’t continue on this course." The decision is one of a number across the country recently in which hospitals and doctors have refused to continue participating in managed care agreements that don’t support the costs of quality patient care.

The physicians noted that these financial pressures are being felt by health care providers throughout Massachusetts. Among the factors they cited were:

• Partners lost $70 million in 1999 on managed care contracts with the three major insurers which control 80% of the market.
• The Balanced Budget Act will cut Medicare funding to Partners roughly $300 million.
• Partners lost $45 million in 1999 alone on state Medicaid cases.
• Partners caregivers are not alone. Massachusetts is the only state in the country where all three major payers (HMO’s, Medicare, and Medicaid) reimburse at levels lower than the cost of providing care.
• Meanwhile, Partners has worked hard to become more efficient, cutting inflation-adjusted cost per patient 20% since 1993 and reducing costs $250 million.

Contact: Jennifer Watson, Partners HealthCare System

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