Worcester Business Journal

wbjournal.com | May 1, 2017 | Worcester Business Journal 21 Reliant acquisition helps doctors, healthcare costs over long term The Worcester Business Journal welcomes letters to the editor and commentary submissions. Please send submissions to Brad Kane, editor, at bkane@wbjournal.com. E arly last summer, our elected officials decided against reauthorizing a Sales Tax Holiday weekend for August 2016, saying the state could not afford it. This year we need to bring back the tax holiday, because we can't afford not to. The retail landscape is changing. More and more com- merce is moving online, and local sellers still find themselves at a competitive disadvantage when it comes to sales tax fairness. Massachusetts merchants have long had to deal with the New Hampshire effect, where the draw of sales-tax-free shopping remains strong, but the internet is where the real com- petition lies. Thousands of internet sellers continue to exploit a loop- hole in the law allowing them to sell into our state and avoid collecting the state's 6.25-percent sales tax. A number of states, including the commonwealth, have tried over the years to whittle away at this problem, but until the federal government grants the states the authority to collect from all remote sellers, true sales tax parity will remain out of reach. This past holiday season, the National Retail Federation reported U.S. retail sales during November and December increased 4 percent over 2015, with non-store sales up 12.6 percent. However, our annual survey of small, locally based sellers showed a 1-percent drop in sales compared to the year before. Collectively here in the commonwealth, we need to do a better job of incentivizing consumers to spend their dollars locally, here in our economy. Retailers want to partner with local and state governments to support our Main Streets, our local employers, our local jobs and our tax base. Municipalities want vibrant downtowns with a mix of com- mercial and residential uses, offices, shops and stores, and restaurants. We simply cannot afford to ignore the consumer trends and small business store closures any longer. While we continue to fight at the federal level and in the courts for national sales tax parity, the Sales Tax Holiday at least levels the playing field for a short 48 hours. And it works. The Sales Tax Holiday is an event exciting consumers, and the state should take advantage of that excitement. Consumers respond, they save a little money, but most importantly – they spend their money here in the state and in our local economy. Local jewelers, furniture stores, appli- ance sellers, electronics and auto parts stores all benefit too with a bump in sales. Those sales keep them in business, allow them to restock for the holiday season, and reward and retain their employees. The economic benefit of a sales tax holiday is multiplied as an investment in our communities, boosting Main Street businesses, providing increased wages for retail workers and rewarding local consumers. Incentivizing consumers to buy in Massachusetts (#BuyInMA), to spend some money here in the common- wealth with a Massachusetts retailer and allowing them to save a little money is not a bad idea. Bill Rennie is the vice president of the Retailers Association of Massachusetts. Mass. needs sales tax holiday A nyone who has talked to Tarek Elsawy since he took over as president and CEO of Reliant Medical Group last year knows one of his primary areas of concern is physician burnout. Not only is the largest independent Central Massachusetts doctor's group running up against a shortage of providers to serve the region's medical needs, but some in the organization are finding the high level of stress and responsibilities put on them by the rapidly evolving healthcare market to be overwhelming. Keeping the increased flow of elec- tronic medical records updated and partnering with insurers to lower costs, aimed at improving the net results, have taken time away from patients. With these issues impacting the entire medical profession, it makes sense Elsawy's lasting legacy could very well be the sale of Reliant to a division of $185-billion healthcare conglomerate UnitedHealth Group, as it likely would help relieve some pressure. As one of the top 10 largest Central Massachusetts employers with 2,500 workers, it certainly is nerve-racking to think about ceding local control from a board of trustees populated by the familiar faces of area business leaders – such as Kevin O'Sullivan of Massachusetts Biomedical Initiatives and Susan Mailman from Coghlin Electrical Contractors – to a corporate board in Minnesota. However, a Reliant sale has the poten- tial to improve both the lives of its employees and the delivery and cost of health care in the region. In his first 17 months with Reliant, Elsawy received justifiable praise for streamlining a stag- nant organization and getting the most out of employees, resulting in the nonprofit turning a $16-million positive margin in 2016 after a loss of $10 million the year prior. Yet, this operational improvement came as other sea changes face Reliant and the industry. Namely, insurance com- panies and healthcare policymakers want to curb medical costs, and providers are likely to feel the sting of lower reimbursements. One particular push is for accountable care organizations (ACOs), partnerships where insurers give a set amount of money to providers like Reliant to keep entire populations healthy, rather than a system where sickness is treated as it arises. Massachusetts is making a big bet on this model to help streamline services and contain its state healthcare costs. ACOs is one area where Reliant's would-be acquirer – Optum (a division of UnitedHealth), with 125,000 employees worldwide – seemingly thrives. A technology and pharmaceutical benefits company, Optum has begun buying clinics and doc- tor's offices to partner with UnitedHealth Group's health insurance division, moving toward the ACO model while leveraging its technological expertise to improve efficiencies. In the first quarter, Optum's earnings grew 16 percent to $1.3 billion. With Reliant's potential sale – its board is voting on May 9 – fears over the ceding of local control need to be balanced with the realities of a chang- ing healthcare industry: costs must come down and providers must find further efficiencies. Doctors – in fact, more of them – will still be needed to serve the region's medical needs, and Optum is likely here with the objective of increas- ing local market share, not just shedding costs. Reliant could eschew the sale and seek to form its own ACO partnership with an insurer, but with an offer on the table from an organization with national scale and built-in efficiencies, an acquisi- tion – as long as it is financially sound – feels like the most attractive option. V I E W P O I N T E D I T O R I A L BY BILL RENNIE Special to the Worcester Business Journal Bill Rennie W WO R D F R O M T H E W E B Comments of the issue "May you, 'Live long and prosper!" - Jeanne Hebert, April 18, on a story about Cold Chain Technologies' move from Holliston to Franklin "In this day and age, there will be people and/ or organizations that will feel offended by a name. Political correctness is becoming more common with everything." - Anonymous commenter, April 18, on a poll question about how to deal with a company's potentially offensive name or title, like the College of the Holy Cross is doing WBJ Tweets of the week "NECC congratulates CEO and Founder Vincent Strully, Jr. on his @WBJournal Business Leader of the Year Award." - The New England Center for Children (NECCforautism), April 21, on its founder's honor as WBJ's Nonprofit Business Leader of the Year "We love this idea! #Worcester could create zoning for #urbanfarms @wbjournal" - My Help, Inc. (@myhelp_inc), April 18, on the Worcester City Council talking about expanding the urban farm industry W

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