New England Diary

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Hospitals becoming insurers

The main entrance of Massachusetts General Hospital, the flagship of Partners HealthCare.

In part of a trend, giant Partners HealthCare, Massachusetts’s largest hospital chain and largest employer, is moving insurance coverage from Blue Cross Blue Shield to Partners’ own insurance company, Neighborhood Health Plan. Its aim is to get a stronger handle on its employees’ medical costs, which continue to rise much faster than overall inflation. This attempt to curb expenses was also seen recently in the creation of a still unnamed health-care-cost-control enterprise by Berkshire Hathaway, JPMorgan Chase and Amazon, which have a total of about a million employees.

The curious thing about the Partners move is that the providers in its empire (which include world-famous Massachusetts General Hospital and Brigham & Women’s Hospital) are known for their very high prices, even by the standards of the world’s most expensive health-care system. That’s if you want to call America’s fragmented and grossly inefficient mess a “system’’. How does Partners plan to take money from one hand and put it in another, assuming that a substantial part of its employees’ medical costs are spent at the hospitals and physician offices of – Partners? I suppose it can save some money by cutting out such middle men as insurance brokers.

Anyway, look for more and more health providers to become insurers, especially in a rich health-care capital such as Greater Boston.