Hospitals across Massachusetts looking to the future come to one common conclusion. Bigger isn’t just better, it’s essential. Two hospitals — both about 35 miles outside Boston — are looking for bigger medical partners and expected to make decisions soon.
Lawrence General Hospital is looking for a clinical partner, and I’m told the the contenders are Beth Israel Deaconess Medical Center, Tufts Medical Center, Partners HealthCare, and Lahey Clinic in Burlington.
Jordan Hospital in Plymouth is believed to be seeking a merger partner and has been screening possible candidates for months. Again, Tufts and Beth Israel appear to be leading contenders, though Steward Health Care System is in the picture, too.
Everyone has something at stake in these decisions. But Beth Israel and Tufts could have the most to gain or lose when the dust settles.
I tried to reach senior executives at the hospitals, but none would talk. Jordan sent me an canned statement about its interest in “potential strategic partnership opportunities.” Thanks for that.
This process of merging hospitals and forming clinical affiliations has been in high gear in Massachusetts for a couple of years now. A big motivation: cost pressures that are prompting the formation of so-called accountable care organizations that offer all kinds of medical services to patients spread across a lot of geography. Medical providers are being pushed toward a system that pays them a flat amount for all a patient’s needs rather than a fee-for-service arrangement that bills insurers for every test and procedure.
The flat-fee system may or may not eventually have a real impact on curbing medical expenses. But it’s coming, and health care organizations must have more resources wherever patients want them.
Big medical organizations like giant Partners and upstart Steward already operate with lots of scale and cover most of the map. But some other Boston hospitals need to build bigger organizations to compete. And suburban facilities require scale to spread risk and a place to send patients in need of complex care. Many need money.
In the latest round of negotiations, Lawrence and Jordan are both trying to find partners to help them succeed in that evolving medical marketplace.
Lawrence already has a clinical relationship with Beth Israel, forged when it perceived a threat from Steward’s acquisition of other hospitals in the area last year. Now it’s seeking a deeper bond with a big partner but won’t go so far as to actually merge with another hospital.
Jordan also has an existing medical relationship, working with Tufts and sending many of its sickest patients to the Boston hospital. A merger with another organization would change all that.
One wild card in the Jordan merger dance: The hospital sits in the district of state Senate President Therese Murray. That matters in Massachusetts, where the governor and state Legislature have led dramatic health care reforms.
As a bidder in both contests, Beth Israel could turn out to be a big winner. It’s already forging clinical relationships with Cambridge Health Alliance and Signature Healthcare of Brockton. An agreement to extend its working relationship in Lawrence and a merger with Jordan would expand Beth Israel’s scope and establish the hospital as a preferred partner for suburban institutions.
Tufts also could emerge as a big winner if it managed to succeed in both negotiations, giving it more clout to negotiate better rates from insurers.
But Beth Israel and Tufts could also end up as big losers.
Beth Israel is an effective incumbent partner at Lawrence, where the top executive comes from — yes — Beth Israel. Losing that contest would hurt, especially if Beth Israel was passed over by Jordan, too.
And Tufts really needs to emerge as the merger partner for Jordan to preserve one of its most important business relationship. A setback in Plymouth might even hurt other pending business arrangements Tufts has forged with two for-profit hospitals west of Boston.
The two hospital contests underway will be settled soon enough. But more medical mergers and affiliation are in our future.Steven Syre is a Globe columnist. He can be reached at firstname.lastname@example.org.