Glancing at the Boston Healthcare Provider Market: Consolidation and Physicians | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Glancing at the Boston Healthcare Provider Market: Consolidation and Physicians

July 28, 2018
by Mark Hagland
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Barbara Spivak, M.D., CEO of MACIPA, an area independent practice association, shares her perspectives on the prospects and context of a proposed mega-merger of Boston-area hospitals

What’s going on in the metropolitan Boston healthcare market these days? A lot. Among other things, major consolidation continues to advance in that market. Indeed, one proposed merger involving 13 area hospitals, is causing considerable discussion—as well as some dissension—in that market.

To wit, the Associated Press published an article on July 19 that included this reporting: “A state watchdog group says a proposed merger between two major Massachusetts hospital systems could drive up health care costs in the state more than $250 million per year. The Health Policy Commission's report released Wednesday says a merger of Beth Israel Deaconess Medical Center and the Lahey Health System could mean $191 million more per year for inpatient, outpatient, and primary care services and almost $60 million more per year for specialty physician services,” the report added. “The higher costs would be passed on to insurers, employers, and consumers. The commission does not have the authority to prevent the merger, which would also include New England Baptist Hospital in Boston, Mount Auburn Hospital in Cambridge, and Newburyport's Anna Jaques Hospital.”

And just the day before, on July 18, The Boston Business Journal reported this: “The state's health care watchdog has strongly criticized a proposed mega-merger between Lahey Health, Beth Israel Deaconess Medical Center and three community hospitals, saying the deal would raise health care spending by $168 million to $251 million. At a Health Policy Commission hearing on Wednesday, commission staff said they had reviewed the proposed merger between Lahey, BI, New England Baptist Hospital, Anna Jaques Hospital and Mount Auburn Hospital, and found that the group would create a second mammoth health system in the state that could enact higher prices in negotiations with commercial insurers. The findings are detailed in a preliminary report the commission voted to release to the public Wednesday afternoon,” the Boston Business Journal’s Jessica Bartlett wrote. “The hospitals must now address the concerns before the commission issues a final report in 30 days.” And she quoted Stuart Altman, chairman of the commission, in saying that “There's a lot of good things in this merger, but our choice (between) letting it go forward (and) not trying to make this a win/win, I find unacceptable. I'd say to the parties: To the extent you can come forward with some help in reducing the likelihood of price increases, we would all be better served."

But the Boston Globe’s Priyanka Dayal McCluskey reported on March 7 that “Led by Beth Israel Deaconess Medical Center and Lahey Health, the hospitals say that by joining forces they can provide high-quality care to patients across Eastern Massachusetts at a lower cost than does Partners, the state's largest health care network. Beth Israel Deaconess and Lahey announced their merger plans in early 2017, after years of on-again, off-again talks,” McCluskey noted. “he deal grew to encompass New England Baptist Hospital in Boston, Mount Auburn Hospital in Cambridge, and Anna Jaques Hospital in Newburyport, and includes about 4,300 physicians. Partners owns Massachusetts General Hospital, Brigham and Women's Hospital, and nine other hospitals, and has about 6,000 doctors.” And she quoted Leemore S. Dafny, a health care economist at Harvard Business School, who told her, “This is a play to really change the dynamics of the market. It's a big play."

And in a June 12 article, McCluskey quoted Dr. Kevin Tabb, chief executive of Beth Israel Deaconess Medical Center, which evolved from [a] shaky start in 1996 to become a profitable and reputable Harvard-affiliated health care provider, as saying that "Cultural differences can be either the downfall of a merger— or, if you embrace them, can really be to the benefit of all.” McCluskey noted that “The proposed merger of Beth Israel Deaconess and Lahey is very different from the earlier deal,” which had created Beth Israel Deaconess Medical Center. This time, she noted, “The health systems are based about 20 miles apart — in Boston and Burlington, respectively — rather than across the street from each other. And, critically, their merger is not coming as a surprise. Executives negotiated on and off for years before unveiling their plans in January 2017. New England Baptist Hospital in Boston, Mount Auburn Hospital in Cambridge, and Anna Jaques Hospital in Newburyport also joined the merger last year.”

McCluskey went on to note that “The deal received one key state approval in April, and other state and federal approvals are pending. Many aspects of the Beth Israel Deaconess-Lahey merger are unknown, including how much the systems will combine operations and how that will affect patients. Post-merger, there could be conflicts between the hospitals and their staffs that no one has foreseen. But the two hospital companies are taking steps now to bridge the differences in their corporate cultures and to reduce worry about the merger,” she added. “Executives and hundreds of other staff from the hospitals are holding frequent "integration planning" meetings. This includes doctors and nurses, as well as corporate employees in departments such as finance and legal.”

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