The bargaining power of the merged institutions was starkly displayed in 2000 when the Tufts Health Plan refused to pay Partners what it considered unjustifiably high prices. Partners promptly announced it would no longer accept Tufts insurance and created an uproar among members of the Tufts plan who wanted to retain access to the two prestigious hospitals. Faced with defections that could destroy its viability, Tufts quickly caved in.

The current case in Massachusetts arose when Partners sought to acquire a hospital and an affiliated physician group southeast of the city. Partners is already the largest provider system in Massachusetts, with about 6,000 doctors and some 2,800 licensed beds in its academic medical centers and community hospitals. A special agency created by the Legislature to monitor health care costs, known as the Health Policy Commission, concluded that the acquisition of South Shore Hospital and related doctors would be likely to drive up total medical spending in the region by $23 million to $26 million a year and possibly much more. It referred the matter to the state attorney general, who has no power to restrict prices but can file an antitrust suit to block a merger and can use that threat to win broader concessions.

On June 24, after months of negotiations, a final agreement between Partners and Attorney General Coakley was filed in a Massachusetts court. The judge has set a public comment period that will end later this month.

The deal negotiated by Ms. Coakley would let Partners acquire two more community hospitals in addition to South Shore, in exchange for temporary restrictions on raising its prices and on further expansion. There would be limits, for example, on the number of community physicians it could add to its networks over the next five years and cost increases would be held to the rate of general inflation, which is typically less than medical inflation, for 10 years.

This could be a dubious bargain. Such short-term restrictions have been abandoned as a tactic by the Federal Trade Commission because, an agency official said last month, they are “an inferior substitute” for letting market competition among separately owned providers determine prices and quality. Large-scale mergers almost always lead to higher prices, reputable research shows. However, the Department of Justice, which has been investigating Partners alongside the state, reportedly supports the settlement.