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Lahey Health, Beth Israel Deaconess Medical Center in Merger Talks

January 31, 2017
by Heather Landi
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The boards of directors of Boston-based Beth Israel Deaconess Medical Center (BIDMC) and Burlington-based Lahey Health announced they have signed a letter of intent to explore creating a combined system to serve communities in Eastern Massachusetts.

According to a joint press release, the letter of intent specifies that a combined BIDMC and Lahey Health system will initially adopt a model of shared governance that will lead to full integration of the two systems in a way that fosters collaboration and innovation and brings value to patients and the state of Massachusetts.

An article in the Boston Globe noted that it’s the fourth time in five years that top executives from the two hospital systems have discussed a possible merger. The article, written by Boston Globe reporter Priyanka Dayal McCluskey, also notes that the deal would be the largest among hospital systems in Massachusetts since the 1994 formation of Partners, the state’s largest health network. The combined organization would start out with eight hospitals, nearly 29,000 employees, and $4.5 billion in annual revenue.

According to the press release, under this shared governance model: Kevin Tabb, M.D., current CEO of BIDMC, will assume the role of chief executive officer of the combined system.

Ann-Ellen Hornidge, current chair of Lahey Health board of trustees, will assume the role of chair of the board of the combined system.

BIDMC will name six members to the combined system’s board. Lahey Health will name six members to the combined system’s board.

Four to six independent members will be named to the combined system’s board.

“Just over six years ago, I came to the Lahey Clinic because of the unique opportunity to help transform a revered physician group and medical center into a vibrant, innovative health care system. During the recruitment process, the board and physician leaders agreed that we would have to grow rapidly and adopt a regional model to provide superior, community focused care at a reasonable cost,” Howard R. Grant, M.D., president and CEO of Lahey Health, said in a prepared statement. “We have successfully built our system with this focus, and our success has led us to the opportunity to affiliate with BIDMC. I am confident that the affiliation path will position Lahey Health for further success and growth. I have enormous confidence in the employees, management teams, medical staffs and boards at Lahey Health and Beth Israel Deaconess Medical Center, and strongly believe that the combination of these organizations will be an enormous success and transformative for the Massachusetts health care market. I look forward to working to bring the benefits of this combined organization to the people of Massachusetts.”

Tabb said in a statement that the health systems are “engaged in ongoing discussions, exploring the opportunity to combine our two systems and create the region’s premier integrated health care delivery system, one that would offer patients exceptional care and unparalleled value, while keeping care in the community whenever possible.” Further, he said, “A combined system would be built on shared values and a mutual commitment to advancing care through research and education. Together, we would offer patients comprehensive, coordinated services across complementary geographies and help contain rising health care costs.”

The combination of the BIDMC and Lahey systems will require various state and federal reviews and approvals.

 

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