Beth Israel Lahey Health Gets State & Federal Approval for Merger

Perhaps the largest and most complex healthcare merger in state history is all but final after Massachusetts Attorney General Maura Healey’s office announced last Thursday that the new system had agreed to the conditions the AG had placed on the deal.

The most dramatic part of the AG’s conditions is to impose a seven-year price cap guaranteeing that all parts of the new entity – Beth Israel Lahey Health (BILH) – will keep price increases below the state’s healthcare cost growth benchmark.  The Health Policy Commission had cautioned earlier that the proposed merger could result in total healthcare spending increasing by more than $200 million annually.

The merger would unite Anna Jaques Hospital; Beth Israel Deaconess Medical Center; Beth Israel Deaconess – Milton; Beth Israel Deaconess – Needham; Beth Israel Deaconess – Plymouth; Lahey Clinic Foundation (including Lahey Hospital & Medical Center); Mount Auburn Hospital; New England Baptist Hospital; Northeast Hospital Corporation (including Beverly Hospital); Northeast Behavioral Health Corporation; and Winchester Hospital. Also, Seacoast Regional Health Systems will merge into Anna Jaques Hospital.

"We share with the state and with the attorney general and her staff a real commitment to strengthening patient care but also to reducing health care costs," said Dr. Kevin Tabb, who will lead BILH. "This agreement with the attorney general does exactly that."

BILH, under this 55-page agreement with the AG (known formally as an “Assurance of Discontinuance”), will for eight years following the merger “engage in joint business planning with its safety net hospital affiliates,” which include Lawrence General Hospital, Cambridge Health Alliance, and Signature Brockton Hospital.

BILH will also attempt to ensure that all its licensed providers under its umbrella are enrolled to treat MassHealth patients, and the new system will undertake a marketing campaign to increasing MassHealth patients.
According to the agreement, BILH will spend $71.6 million over eight years “to improve access to healthcare for low-income and underserved communities, with a focus on financial support for community health centers, safety net hospitals, and behavioral health.”

The Federal Trade Commission, which also has oversight over the deal, also announced last Thursday that based on the AG’s agreement, the FTC was closing its investigation into the deal.