HPC Says BID-Lahey Merger May Be Costly

The Health Policy Commission has weighed in on another hospital/health system merger, reaching the opposite conclusion from the merger’s proponents, who say the hospital deal will result in better coordinated care and lower healthcare costs.

The HPC last Wednesday released its Preliminary Cost and Market Impact Review (CMIR) on the proposed merger of Lahey Health System, Beth Israel Deaconess Medical Center and its affiliated hospitals, New England Baptist Hospital, Mount Auburn Hospital, Seacoast Regional Health Systems (including Anna Jaques Hospital), and the Beth Israel Deaconess Care Organization physician practice. The new system would be known as Beth Israel Lahey Health (BILH) and would be the second largest system in the state financially after Partners HealthCare.

The HPC preliminary report estimates that BILH’s enhanced bargaining leverage would increase commercial prices, raising total healthcare spending by an estimated $138.3-to-$191.3 million annually. While the HPC acknowledged that “plans to shift care to BILH from other providers and to lower-cost settings within the BILH system would generally be cost-reducing,” they did not believe the savings would offset projected price increases.

The Lahey-BID systems have 30 days to respond to the report and the HPC says it plans to issue a final report in September. The HPC can’t stop the merger but it can refer the case to the Attorney General’s office, which can impose conditions on the agreement or halt it entirely.