State Says Lahey-Beth Israel Merger Would Raise Healthcare Costs

BOSTON, MA -- The states Health Policy Commission released a report Wednesday that said the proposed merger between Beth Israel Deaconess Medical Center and Lahey Health would increase healthcare costs in Massachusetts. The proposed merger, which was approved by the Massachusetts Public Health Council in April, would create the state's second biggest healthcare company after Partners HealthCare.

"Current evidence does not support the parties' argument that the merger will reduce spending by increasing competition," the report said.

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.

The report notes that most of the patients served by the combined healthcare company would come from affluent companies and, as a result, it would have the lowest percentage of Medicaid patients of any health system in the state.

Lahey and Beath Israel argue that the merger will allow them to better compete with Partners. But critics of the deal had their position that the merger would drive up healthcare costs bolstered by the report.

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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).