State Adds Restrictions On Proposed Lahey Merger

BURLINGTON, MA -- The Massachusetts Public Health Council amended its April approval of the planned merger of Beth Israel Deaconess Medical Center and Lahey Health to add restriction on the plan that would require the combined hospital to keep costs consistent and keep serving low-income patients. The group, which announced the restrictions Wednesday, said the changes are needed after a report last month said healthcare costs could rise $128.4 million to $170.8 million per year because the bigger system would be able to raise prices.

In addition to continuing to serve patients on Medicaid, the combined hospital will have to submit a report six months after the merger is finalized to address the low percentage of Medicaid patients they currently serve. The body also will require the combined hospital to certify that all of its employed physicians participate in the state Medicaid program within two years.

In July, the Massachusetts Health Policy Commission released a report that said the proposed merger would increase healthcare costs in Massachusetts. The healthcare systems responded with their own report last month, saying the merger would cut healthcare costs in Massachusetts by $149 million to $270 million.

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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File photo 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).