October 10, 2018

State to impose conditions on Beth Israel-Lahey merger

Photo/Flickr/Beth Israel Deaconess Medical Center
Beth Israel Deaconess Medical Center in Boston. Beth Israel's CEO said conditions imposed by the state on a proposed merger with Lahey Health "are strict, and take us to the outer edge of what I think is manageable."

The state Public Health Council on Wednesday voted to impose a series of new conditions on a pending 13-hospital merger involving Beth Israel Deaconess and Lahey Health, with terms that council members said are intended to improve patient access to care and limit potential cost escalation.

The move comes on the heels of a Health Policy Commission review that said the new system's enhanced bargaining clout with commercial insurers could enable it to increase prices by $128.4 million to $170.8 million a year for inpatient, outpatient, and adult primary care services.

Among other measures, the additional conditions require the system to submit to the Department of Public Health a proposal for "how it will address the low percentage of MassHealth in its payer mix," and to make "good faith efforts" to ensure the number of MassHealth patients it serves does not decrease.

Beth Israel CEO Kevin Tabb, who would lead the new $5 billion system, said the hospitals are still in talks with Attorney General Maura Healey and said the "totality" of conditions he expects to be imposed by the state "are strict, and take us to the outer edge of what I think is manageable."

"Yes, this is something that we can and must do, but it is approaching the outer limits of what's doable, and I need to further remind people that while I agree completely with many of the concerns that have been raised about the woes of health care in Massachusetts and in this country, we can't solve all of that on the backs of this single transaction," he said.

Bonny Gilbert of the Greater Boston Interfaith Organization urged the council to take a harder line and put forward conditions "with real teeth."

"There is nothing here to protect us from higher prices for premium payers of Massachusetts," she said.

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