Steward snatches 150 doctors affiliated with Beth Israel Deaconess physicians group

As health care competition heats up in Massachusetts, upstart Boston hospital chain Steward Health Care System has lured away 150 doctors affiliated with the Beth Israel Deaconess Medical Centers physician group by making them an offer so generous that Beth Israels lawyers question whether its terms amount to illegal kickbacks.

Stewards offer to the doctors in the Whittier Independent Practice Association, based in Newburyport, could potentially bring them as much as $3 million more next year under one key insurance contract, according to Whittiers estimate.

But a law firm hired by Beth Israel suggested that some incentives Steward offered Whittier violate federal and state anti-kickback statutes. Those laws prohibit paying for business that can be billed to government health insurers. A spokesman for Steward, a fast-growing, for-profit health care company, said its contract with Whittier is legal.

The battle between Beth Israel and Steward over Whittier reflects an increasingly aggressive struggle by hospital physicians groups to win over doctors - and the business they can generate - in a radically shifting health care sector.

We have a market full of very competitive leaders, and this [Whittier] switch is a precursor of things to come, said Thomas Glynn, public policy lecturer at Harvards Kennedy School.

Steward officials said they believe executives and doctors at Beth Israel, a Harvard-affiliated Boston teaching hospital, are rankled not only by the impending defection of their doctors, but by the Steward business model. That model seeks to keep health care local by leveraging the power of the 10 community hospitals Steward bought in Eastern Massachusetts over the past year.

Theres a large amount of care that could be appropriately done in the community that is leaking to high-cost hospitals in Boston, said Dr. Mark Girard, president of Steward Health Care Network, the physicians organization in Stewards hospital system.

Whittier wants to join Steward on Jan. 1 so it can take part in a potentially lucrative insurance contract with Blue Cross Blue Shield of Massachusetts. But that date is just 50 days away, and the doctors group is required to give 180 days notice before it can end its affiliation with the Beth Israel Deaconess Physicians Organization, known as BIDPO. That means that Beth Israel would have to sign a waiver to let the doctors go - something it has not yet agreed to do.

This is a disappointment, said Dr. Stuart A. Rosenberg, president of the hospitals physician group and a member of the Beth Israel board of trustees. It would be foolish to say otherwise. Wed prefer to gain members than to lose members. Beth Israel physicians signed their own affiliation deal with Whittier less than three years ago.

While some doctors are employed by hospitals, many choose to remain independent. But they usually affiliate with hospitals so they can refer patients. Community hospital groups, for their part, often seek to join larger physicians organizations allied with Bostons academic medical centers so they can coordinate patient care and jointly negotiate insurance contracts.