Watchdog group asks Massachusetts AG to review Beth Israel-Lahey merger

The Massachusetts Health Policy Commission has voted unanimously to have the state’s attorney general review the planned merger between Beth Israel Deaconess Medical Center and Lahey Health. 

The vote leaves AG Maura Healey the option to challenge the deal or set restrictions on how it is finalized. The commission has asked her office to consider “strong and enforceable steps” the combined system could follow to ease concerns about the potential for rising costs. 

In tandem with the meeting on Thursday, the commission issued the final version of its analysis on the merger, which projects that it could lead to significant price increases. 

The commission estimates that the combined Beth Israel-Lahey system would be able to use its enhanced leverage to demand higher prices from commercial payers, leading total health spending to rise between $124.8 million to $170.8 million each year for inpatient, outpatient and primary care services. 

“The question is: Does the merger serve the commonwealth? The answer is no—not yet,” Donald Berwick, M.D., a member of the commission and president emeritus of the Institute for Healthcare Improvement, said at the meeting. “Costs are going to go up. They’re going to go up substantially. We need some sort of restraint.” 

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The combined health system plans to focus on shifting patients to more low-cost sites of care, but the analysis suggests that these savings would not offset the potential price increases. 

The findings are in line with a draft version of the commission’s report, which was released in July. 

Beth Israel and Lahey argue that their merger will have the opposite effect on prices, as together they would form a system that could rival Partners Healthcare, the largest—and priciest—provider in Massachusetts and the parent system to Massachusetts General Hospital and Brigham and Women’s Hospital. 

The commission, however, found that there’s little evidence that the Beth Israel-Lahey deal would force a change in Partners’ market share or that the increased competition would lead it to decrease its prices. 

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Michael Wagner, M.D., then-CEO of Tufts Medical Center and now chief physician officer at Wellforce, echoed those same concerns at a hearing on the merger earlier this year, saying that the combined health system would likely “siphon” patients away from other providers, including struggling community health systems and physicians. 

The commission also asked the Department of Public Health to reconsider its approval of the merger, which it issued before any cost estimates were released. 

The department said it will re-evaluate the merger on Oct. 10, The Boston Globe reported

“This examination will include assessing the project’s impact on public health value, access to care and quality of care,” a spokesperson for the department to the newspaper.