The Massachusetts Health Policy Commission has reviewed the effects of sale of financially troubled Steward Health Care's physician group, Stewardship Health, to Nashville, Tenn.-based Rural Healthcare Group, part of private equity firm Kinderhook Industries, for $245 million in cash, according to Oct. 10 comission meeting documents.
Here are eight things to know:
1. The HPC conducted a preliminary review of the sale assessing potential financial and market impacts, but did not proceed with cost and market impact review cased on the findings of the preliminary review.
2. The commission found that while the sale presents "uncertainties" as Rural Healthcare Group is "a young organization with a limited track record" and is a new private equity-backed entrant to the Massachusetts market. However, it noted that "the immediate sale to [RHG] would allow Steward providers to continue caring for their patients, providing stability for patients, staff, and the healthcare market at large," according to the report.
3. The agency's findings concluded that the acquisition would not increase market share in Massachusetts. In fact, Stewardship Health's physician market share may decrease as providers shift to other networks, making it unlikely that the transaction will drive up costs.
4. “The HPC analysis did not find that this transaction is likely to have negative impacts on quality of or access to services in Massachusetts,” according to the report. RHG has also committed to continuing participation in MassHealth and focus its business strategy on "quality improvement, participation in value-based contracts and growth in volume, rather than by cutting internal costs or services."
5. Through the deal, Rural Healthcare Group, which comprises 17 clinics across the U.S., would take on Stewardship's system — an integration of Steward Health Care Network and the Steward Medical Group, a primary-care network of around 5,000 employed and affiliated providers. Stewardship is also offered to Medicaid and commercial populations.
6. Some state legislators have raised concerns about RHG's ties to private equity and its connection to NaviHealth, a health software company owned by UnitedHealth Group that is involved in a class-action lawsuit alleging that its AI algorithm wrongfully denied Medicare Advantage patients care.
7. Sens. Ed Markey and Elizabeth Warren expressed concerns that the deal "would empower yet another private equity firm to prey on Massachusetts patients and providers, siphoning taxpayer dollars out of the system for the profit of a few corporate executives and shareholders," according to a letter to Rural Healthcare Group CEO Benson Sloan.
8. In June, Optum, parent company of ASC chain SCA Health, backed out of plans to acquire the 175-physician Stewardship Health.
9. While the HPC cannot approve or prohibit transactions, it may refer its report and findings to other state agencies for possible further action.