Massachusetts state officials review Lahey Health, Beth Israel Deaconess Medical Center merger deal

handshake / shaking hands
A state review is underway for the planned merger between Lahey Health and Beth Israel Deaconess Medical Center. (daizuoxin/iStock/Getty Images)

Beth Israel Deaconess Medical Center and Lahey Health finalized a potential merger in July, but state officials are taking a long, hard look at the deal before it's approved.

The Massachusetts Department of Health organized a public forum this week to gather views on the deal, which includes 13 hospitals and would significantly reshape the healthcare landscape in the eastern part of the state, according to an article from MassLive. The new system would unite under a new parent company, "NewCo."

Residents from Newburyport, Massachusetts, who attended the hearing generally backed the merger, which would include the local Anna Jaques Hospital, one of the few independent facilities left in the state. 

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Research suggests that the industry's ongoing consolidation can lead to increased costs and other potential downsides for patients. However, independent hospitals such as Anna Jaques that choose to stay on their own face financial challenges. 

The hearing was held as part of the state's broader review of the merger deal. Massachusetts' Health Policy Commission is also taking a look at the merger, with their complete report due this summer, according to the agency. 

The commission chose to review the deal because it could impact so many patients and involves a significant amount of money, its chair, Stuart Altman, Ph.D., said in the statement. Altman said that the committee could recommend that state agencies or the attorney general take action against the deal. 

The merger "represents the most significant change in the structure of the Massachusetts healthcare market in more than 20 years and will reshape the delivery of care for millions of patients," Altman said. 

RELATED: 2018 healthcare outlook—Focus on M&A deals, unpaid medical bills and value-based care initiatives 

Lahey Health and Beth Israel, meanwhile, both maintain that the merger would lead to an increased market share and lower costs, especially as they say regional healthcare costs are far higher than those in a number of other states. 

"We’ve received a fair amount of encouragement on this—more than I expected—from a variety of different players," Kevin Tabb, M.D., CEO of Beth Israel, said. 

Plenty of mega-mergers in healthcare made waves in 2017, and that is a trend that is likely to continue this year, experts say. But healthcare industry watchers also predict that more non-traditional partnerships are likely in 2018, too.