The consolidation of the Massachusetts health care industry continued Thursday as Boston’s Beth Israel Deaconess Medical Center acquired one of the largest remaining independent hospitals in the state, Jordan Health Systems Inc.
The deal comes six months after Beth Israel Deaconess signed a letter of intent to buy the parent of Jordan Hospital, a 155-bed facility in Plymouth. Beth Israel Deaconess will keep Jordan’s local management and board of directors. The companies did not disclose financial details.
“The affiliation enhances our ability to do more for our patients,” said Dr. Jim Fanale, Jordan’s senior vice president of system development. “It enhances our brand, our reputation and brings a high-quality partner to the community. We’re delighted and we’re excited that this is going to occur.”
The companies said the Jordan name is likely to change, depending on the results of a market research study. Fanale said the merger would not result in immediate layoffs, a point on which Beth Israel Deaconess chief executive Kevin Tabb declined to comment. Tabb said that issue has not yet been addressed.
Jordan employs about 1,500 people.
‘The affiliation enhances our ability to do more for our patients.’
“Jordan Hospital is a really good hospital,” Tabb said. “We think we can make them even stronger, in terms of clinical connections, their patients and financially to continue their mission of providing high-quality care for the foreseeable future.”
The deal is a blow to Tufts Medical Center, which will see its clinical affiliation with Jordan severed after the deal receives final approval by the state’s Public Health Council later this year. Tufts, another Boston teaching hospital, had previously worked with for-profit Vanguard Health Systems to acquire the Plymouth hospital.
The affiliation further expands Beth Israel Deaconess’ network into the Boston suburbs as it attempts to better compete with the larger players in Eastern Massachusetts, Partners HealthCare System and for-profit Steward Health Care System.
The Beth Israel Deaconess network includes hospitals in Needham and Milton; its own physicians groups; and Atrius Health, a Newton-based chain of doctors groups, such as Harvard Vanguard Medical Associates. A number of other providers are affiliated with the network as well.
A larger network will give Beth Israel Deaconess more leverage to negotiate higher fees with health insurers, which are pushing hospitals to accept set payments for a patient’s total health care instead of billing for individual visits.
Lynn Nicholas, chief executive of the Massachusetts Hospital Association, said the merger will also allow Jordan to reduce overhead costs, which is critical to community hospitals as Medicaid and Medicare payments drop. The affiliation with Beth Israel Deaconess will also allow Jordan to provide more services and options to patients, and improve its quality.
Nicholas said health care systems are expanding to appeal to insurers and compete for patients by providing a wide variety of health services, including community and research hospitals and physician networks.
“There will be more fierce competition between health systems,” she said. “There will still be a great deal of choice, but there will also probably be lower health care costs to employees in the long run.”