HPC to Review Multi-Hospital Merger

The deal involving Lahey Health, the Beth Israel Deaconess system, three independent hospitals, plus a number of physician practices will get a full cost and market impact review (CMIR) from the Health Policy Commission, following a full commission vote on the issue last Tuesday.

Under a CMIR process, HPC staff perform a detailed investigation to determine how a proposed merger will affect healthcare costs, access, healthcare quality, and how the market functions. The HPC doesn’t have the authority to stop a proposed merger but if it finds a transaction is detrimental to the state’s overall healthcare system it can refer its report to the Attorney General’s office, which does have the power to approve or reject a merger.

The deal at issue would create a new system consisting of the current Beth Israel Deaconess Medical Center, Beth Israel Deaconess Hospital – Needham, Beth Israel Deaconess Hospital – Plymouth, and Beth Israel Deaconess Hospital – Milton, along with the Lahey-owned Lahey Hospital & Medical Center, Beverly Hospital, and Winchester Hospital. Also included are the independent Anna Jaques Hospital, New England Baptist Hospital, and Mount Auburn Hospital.

Under the proposed deal, the new system would control the following contracting entities: Beth Israel Deaconess Care Organization (BIDCO), the Lahey Clinical Performance Network and Lahey Clinical Performance ACO. Mount Auburn Cambridge Independent Practice Association, which currently contracts independently, would be brought under the umbrella of the new system.

HPC’s review could run into July 2018.

The hospitals and physician practices involved in the deal argue that they will be able to attract care away from higher-priced systems and drive down total healthcare spending in the state. They also argue that they’ll be able to create new insurance products, invest in alternative payment systems, and expand access to needed services, including behavioral health and primary care. In a media release the Lahey-BIDMC group said they welcome the HPC review as a way to show their claims about the new system have merit.