Beth Israel-Lahey merger could raise healthcare spending

Massachusetts healthcare spending would increase by up to $251 million per year if the planned merger between Beth Israel Deaconess Medical Center, Lahey Health and several other hospital systems goes forward, according to a preliminary report from the Massachusetts Health Policy Commission.

The deal, which also involves Boston's New England Baptist Hospital, Mount Auburn Hospital in Cambridge and Anna Jaques Hospital in Newburyport, would create the second-largest healthcare network in the state.

The deal would increase the merged organizations' bargaining leverage with commercial payers and poten- tially allow the merged system to boost prices around 5% to 10%, increasing spending by an estimated $138.3 million to $191.3 million annually for inpatient, outpatient and adult primary-care services. Specialty physician services spending could increase by an additional $29.8 million to $59.7 million. These conservative price hike estimates would still result in lower prices than Partners HealthCare, the commission found.

The Massachusetts' attorney general also warned that the deal could raise healthcare costs and impede access.

The Department of Public Health will review the deal, taking the commission's findings into consideration. When the Public Health Council approved the merger in April, it said its approval could change pending the commission's report. The hospitals have until mid August to address the commission's concerns before the final report is published.