Health commission refers mega-merger for review
An apprehensive Health Policy Commission voted unanimously yesterday to refer the Beth Israel-Lahey Health mega-merger to Attorney General Maura Healey and Public Health Commissioner Monica Bharel for further review, with commission members hoping enforceable “guardrails” can be put in place to mitigate their concerns that the deal will threaten access to care and push health care costs $250 million higher.
The merger, announced in July 2017 and under government review since then, could lead to significant increases in health care spending and would create a hospital and health care network rivaling the market share of Partners HealthCare System, according to the final report of a state commission set up in 2012 by state government leaders frustrated with unaffordable increases in health care costs.
The report arrives two months after the collapse of Beacon Hill talks on a bill aimed at stabilizing struggling community hospitals and as the commission analyzes the impacts of Question 1, a ballot initiative that would require hospitals to comply with new nurse staffing mandates.
The Beth Israel-Lahey Health transaction would give the new system enhanced bargaining leverage with commercial insurers, enabling it to increase prices by $128.4 million to $170.8 million a year for inpatient, outpatient and adult primary care services, the commission concluded in its 239page report.
In addition to cost increases associated with bargaining leverage, spending for specialty physician services could rise by $29.8 million to $59.7 million annually, beyond the increases the parties would have otherwise received, the commission reported, calling its cost escalation estimates conservative.
The deal involves, among other care providers, CareGroup’s Beth Israel Deaconess Medical Center, New England Baptist Hospital and Mount Auburn Hospital in Cambridge; Lahey Health System’s Beverly Hospital, Addison Gilbert Hospital in Gloucester, BayRidge Hospital in Lynn and Winchester Hospital; and Seacoast’s Anna Jacques Hospital in Newburyport.
“We have not received a picture that shows us the Commonwealth as a whole will benefit from this merger,” said commission member Don Berwick, a candidate for governor in 2014 and administrator of the federal Centers for Medicare & Medicaid Services during the Obama administration.
Megan Wulff, the commission’s deputy director of policy for market performance, cast doubt on the petitioner’s claims that benefits from the transaction will flow due to increased competition.