HPC on BID-Lahey Merger: AG Review Needed

The Health Policy Commission last Thursday released its final report on the proposed large merger of hospitals and physician practices that would be known as Beth Israel Lahey Health (BILH), ruling that the new system needs further review from the Attorney General’s office. The HPC also called on the Department of Public Health to reconsider its previous Determination of Need approval it had granted BILH.

Attorney General Maura Healey’s office now has the authority to impose certain restrictions or conditions on the merger.

The HPC found that the merger would result in the new BILH having more bargaining leverage with insurers, thereby potentially increasing total healthcare spending by an estimated $128.4 million to $170.8 million annually for inpatient, outpatient, and adult primary care services.

“[W]hile the BILH parties have historically been low-priced to mid-priced and have not increased their prices relative to the market as they have grown through smaller transactions to date, the BILH transaction is likely to enable the parties to obtain significantly higher commercial prices across inpatient, outpatient, and physician services,” the HPC wrote in its final “Cost And Market Impact Review” report. “Achieving all of the parties’ goals for their proposed care delivery programs and for shifting patients to lower-cost settings would result in savings, but these savings would be less than the impact of projected price increases as a result of the parties’ enhanced bargaining leverage.”

The HPC specifically asked the AG to “assess whether there are enforceable steps that the parties may take to mitigate concerns about the potential for significant price increases, and maximize the likelihood that BILH will enhance access to high quality care, particularly for underserved populations.”