THE BURNED OVER DISTRICT

Consider this long look at the prime movers in the cost of health care in Massachusetts.

It was the gentleman's agreement that accelerated a health cost crisis.

And Dr. Samuel O. Thier, chief executive of Partners HealthCare, and William C. Van Faasen, chief executive of Blue Cross Blue Shield of Massachusetts, weren't about to put it in writing.

Thier's lawyers cautioned that a written agreement between the state's biggest hospital company and its biggest health insurer that would make insurance more expensive statewide might raise legal questions about anticompetitive behavior, according to officials directly involved in the talks.

And so, in May 2000, the two simply shook hands on this: Van Faasen would give Partners doctors and hospitals the biggest insurance payment increase since Massachusetts General and Brigham and Women's hospitals agreed to join forces in 1993.

In return, Thier would protect Blue Cross from Van Faasen's biggest fear: that Partners would allow other insurers to pay less. Those who helped broker the deal say Thier promised he would push for the same or bigger payment increases for everything from X-rays to brain surgery from Van Faasen's competition, ensuring that all major insurers would face tens of millions in cost increases. Blue Cross called it a "market covenant."

The deal, never before made public, marked the beginning of a period of rapid escalation in Massachusetts insurance prices, a Spotlight Team investigation has found, as Partners repeatedly used its clout to get rate increases and other hospitals tried to keep up. Individual insurance premiums have risen 8.9 percent a year ever since the "market covenant," state figures show, more than twice the annual rise in the late 1990s...

...As the state slashed oversight of healthcare, no private company was able and willing to moderate Partners' ambitions. Blue Cross, which now controls 60 percent of the health insurance market, was best positioned to do so but flinched at the possibility of a public tangle. As former Blue Cross executive Peter Meade said at a meeting of company executives in 2000 at which some urged a tougher stand against Partners: "Excuse me, did anyone here save anyone's life today? We are a successful business up against people that save people's lives. It's not a fair fight."

In this laissez-faire environment, Partners has been free to use highly aggressive tactics with hospitals and insurance companies, especially those that don't accede to its demands. In 2007, Partners expelled 290 doctors at Beverly Hospital from its system, exposing them to substantial pay cuts, because they were sending some patients to teaching hospitals outside of Partners

It's a sordid story with Hippocrates easily forgotten in the lust for money and power. Can you say "Universal, single payer health insurance through Medicare"? If you can't, just consider this the beginning of "health care" to come.