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Can This Man Control Your Health Care Costs?

Posted by Christopher Geehern on Sep 14, 2011 9:41:00 AM

de la TorreRalph de la Torre is operating on the Massachusetts health care market with the same precision he used to become one the nation’s foremost heart surgeons.

Employers are hoping the patient makes a speedy recovery.

The Chairman and CEO of Steward Health Care System shocked the medical establishment in November 2010 with a deal to have private equity giant Cerberus Capital purchase six struggling Caritas Christi hospitals. For-profit Steward has since grown into the largest integrated community care organization in New England with eight hospitals, 14,000 employees and four more acquisitions scheduled to close before year-end.

Friends and colleagues say the warp-speed acceleration of Steward into a major player in the health care market reflects what the Boston Globe called the “ample ability and breathtaking ambition” of de la Torre, a doctor-turned executive who grew up the son of a Cuban-American physician in Florida. More importantly, observers say, de la Torre’s vision of a network of low-cost, high-quality community hospitals has changed the dynamics of a health care market that remains one of the most expensive in the country.

De la Torre will speak at the AIM Executive Forum this Friday at 8 a.m. at the Westin hotel in Waltham.

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The growth of Steward comes as hospitals, doctors, insurers, employers and policymakers seek to control health premiums by changing the way in which health care is delivered. As Massachusetts moves to a system of global payments and integrated accountable care organizations, the community hospitals that Steward is acquiring take on newfound importance.

Can de la Torre create a new national model of delivering health care? Analysts say the fact that he choreographed an $895 million deal involving a private equity firm, a network of former Catholic hospitals, labor unions, community activists and public officials tells you all you need to know about the determination of the former chief of cardiac surgery at Beth Israel Deaconess Medical Center.

Andrew Dreyfus, President and CEO of Blue Cross Blue Shield of Massachusetts calls de la Torre’s successful conclusion of the Cerberus acquisition “one of the most remarkable acts of public persuasion that we’ve seen in this community on a long time.”

In the past eight months, Steward has acquired Merrimack Valley Hospital in Haverhill and Nashoba Valley Medical Center in Ayer. The company has also signed purchase agreements for five additional hospitals – Morton Hospital and Medical Center in Taunton; Landmark Medical Center in Woonsocket, Rhode Island; Rehabilitation Hospital of Rhode Island in North Smithfield; Quincy Medical Center in Quincy; and Saints Medical Center in Lowell.

Steward facilities now total more than four million square feet and the company has committed to $270 million in construction during the next five years. Total investment in facility upgrades and renovations will hit $260 by the end of 2011.

The key question for employers is whether Steward and other providers can succeed in controlling cost by convincing patients to obtain all but the most complex medical care at community hospitals. It is the same issue identified by Attorney General Martha Coakley in a recent report that challenged employers to buy health insurance that used tiered or limited networks to direct employees to reasonably prices treatment.

De la Torre believes his plans will work.

“My goal is to fix health care,” he told The Boston Globe.

Topics: Health Care Costs, Benefits

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