June 22, 2001

Partners HealthCare announced June 19 that a new four-year agreement has been reached with Harvard Pilgrim Health Care. The agreement covers reimbursements for medical services provided by physicians and hospitals throughout Partners. Concluded after discussions that lasted more than six months, the agreement also is designed to reverse the significant losses Partners had incurred under prior contracts, as well as to cover the cost of care delivered to Partners patients.

"This contract will raise levels of payment by Harvard Pilgrim to cover the cost of care delivered by our hospital and physicians," says Peter L. Slavin, MD, chairman and CEO of the Massachusetts General Physicians Organization (MGPO). "This agreement, like the Blue Cross and Tufts contracts that preceded it, demonstrates another reason why being part of Partners HealthCare is valuable to the MGH and MGPO."

The new agreement, which is subject to approval by state regulators, includes provisions in a number of key areas that will benefit patients of all Partners hospitals and physicians. These provisions are expected not only to protect the quality of patient care, but also to be more cost-effective because chronic diseases are treated in ways that prevent them from becoming more serious.

For example, under the terms of the agreement, adult diabetes patients will be encouraged to receive medical tests they need – such as regular eye exams – to better manage their long-term condition. Physicians will be able to treat pediatric asthma patients with effective suppressive therapies, rather than just providing inhalers to treat asthma attacks. Other portions of the contract will support the nationally recognized efforts of Partners hospitals and physicians to reduce medication errors.

"Not only does this contract fairly reimburse our physicians and hospitals for the costs of care, but it creates an innovative model that is consistent with our caregiving mission too," says Samuel O. Thier, MD, president and CEO of Partners. "This contract recognizes and supports our physicians' primary goal, which is to give the best possible care to their patients."

In a separate agreement, Partners has agreed to purchase six buildings currently owned by Harvard Pilgrim and leased by Harvard Vanguard Medical Associates physicians as medical offices. The buildings, which will be purchased at a cost of $68 million, are located in Medford, Peabody, Wellesley, Cambridge, West Roxbury and Braintree. Under the agreement, Harvard Vanguard Medical Associates will continue as tenants of the centers under a 20-year lease.