October 27, 2000

After months of negotiations, Partners HealthCare physicians and hospitals announced Monday that they plan to discontinue participation in the Tufts insurance plan as of April 1, 2001. The Partners hospitals that are joining in this decision include the MGH, BWH, North Shore Medical Center, Newton-Wellesley, Faulkner, Spaulding and the Partners Community HealthCare network. The Tufts senior plan, Secure Horizons, will not be affected.

The key issue in the negotiations focused on chronic shortfalls in the amount Tufts reimburses the doctors and the hospitals for the care they provide. Hospital HMO losses on the Tufts contract totaled $42 million in just two years. Physicians have not seen their Tufts fees increase in five years. These fees cover all the costs of running a physician's practice. During that time, inflation and the cost of providing care have risen 13 percent. New and better medical treatments have been introduced, but reimbursements have not kept pace.

"Both sides tried hard to resolve this situation, but unfortunately we were not able to reach an agreement," said Peter L. Slavin, MD, chief executive officer of the Massachusetts General Physicians Organization. "We 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."

To support Partners physicians and hospitals, Tufts health insurance plan will no longer be offered to Partners employees as of April 1. Employees who are currently enrolled in Tufts soon will receive a letter with detailed information about this change and their health coverage options. Employees may choose to stay in Tufts until April 1 or choose a different plan during the upcoming open enrollment period.

To help minimize the impact on patients, Partners is sending a letter to all Tufts patients, their doctors and their employers to alert them to this decision and inform them of their options for continuing to be cared for by Partners physicians and hospitals. Steps have been taken to ensure that patients in an ongoing course of treatment – such as chemotherapy or prenatal care – who need to keep seeing their current physician, will continue to do so. That care will be covered by Tufts as provided for under the terms of the current contract. To provide information for both patients and Partners employees, a web site has been set up at www.partners.org/tufts, as well as a call center to answer questions. The call center number is (800) 554-9545.

"We understand that this is a very significant step, and we had hoped these discussions with Tufts would have been resolved successfully," said Samuel O. Thier, MD, president and chief executive officer of Partners. "In the end, Tufts' proposals simply were not adequate to fund the standard of care we pride ourselves on. One key reason we formed Partners was to protect our legacy of patient care excellence in the face of these challenges. This decision, while very difficult, is consistent with that founding goal."