Hospitals Say Merger Would Cut Healthcare Costs

BEVERLY, MA -- A proposed merger that includes Beverly Hospital, Lahey Medical Center in Peabody and Lahey Outpatient Center in Danvers would cut healthcare costs in Massachusetts by $149 million to $270 million, according to the two hospitals that want to combine. The assertion by Beth Israel and Lahey Health comes one month after the Massachusetts Health Policy Commission released a report saying the exact opposite -- that the merger would cost patients and insurers between $138 million per year.

Not surprisingly, the hospital report says that the two company's "fundamentally disagree" with the commission's report and argues that the state "grossly overstated" the impact the merger would have on costs. Beth Israel and Lahey say their findings were based largely on increased efficiency and a more formidable competitor to Partners Health, the state's largest health care provider.

The Health Policy Commission's review of the merger is ongoing. While the commission cannot stop the merger, it can make recommendations to the Attorney General's office which could attempt to block the merger through anti-trust laws. Attorney General Maura Healey has previously said she is concerned about the impact the merger would have on consumer health care costs.

The impact of the merger would be felt throughout the greater Boston area. In addition to its hospital and medical center in Burlington, Lahey operates Beverly Hospital, which has a staff of more than 600 physicians and a service area covering 13 communities. According to state data, Lahey Medical Center in Peabody is the city's 10th largest employer and has between 250 and 500 employees.

Lahey Medical Center in Peabody has 243 practicing physicians across 46 specialties. The center serves more than 800 outpatients each day and includes a 10-bed hospital. It's not clear what impact the merger would have on staffing or patient services at Lahey Medical Center in Peabody or Beverly Hospital.

While the April approval by the Massachusetts Public Health Council was seen as a big step forward for the merger, the Health Policy Commission and Attorney General Maura Healey still need to sign off on the deal. And Wednesday's report and hearing by the body suggest at least one of those approvals may not be forthcoming.

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Photo of Lahey Hospital & Medical Center in Burlington by Dave Copeland/Patch.

Dave Copeland can be reached at dave.copeland@patch.com or by calling 617-433-7851. Follow him on Twitter (@CopeWrites) and Facebook (/copewrites).