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Beth Israel Deaconess, Cambridge Health to partner

Beth Israel Deaconess Medical Center, a Boston hospital aggressively courting health providers in the suburbs, has formed a partnership with Cambridge Health Alliance, the two hospital systems announced Thursday.

The collaboration gives doctors with the Cambridge health system greater bargaining power with health insurance companies and a formal relationship with a major teaching hospital that provides many services they do not, such as advanced cancer care and neurosurgery.

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It also means that nearly 100 primary care physicians will join Beth Israel Deaconess’s network next year, ending their affiliation with Partners HealthCare’s physician organization.

Beth Israel Deaconess and the Cambridge Health Alliance would remain financially independent. The Cambridge system, which includes Somerville Hospital, Whidden Hospital in Everett, and Cambridge Hospital, had an overall loss of $28.5 million in the fiscal year ended in June 2012.

The agreement, which has been in the works since last fall, comes as hospitals are under pressure to lower costs and are looking for ways to share the financial risk they will have to take on under new insurance programs.

The Globe reported last month that Beth Israel Deaconess is exploring a relationship with Atrius Health, a consortium of five physician groups, and the Lahey Health system of Burlington.

The hospital also may more formally ally itself with New England Baptist Hospital and Signature Healthcare, which operates Brockton Hospital, and it is moving forward on plans to acquire Jordan Hospital in Plymouth.

The deal means that nearly 100 primary care physicians will join Beth Israel’s network next year, ending their affiliation with Partners Health-Care’s organization.

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Dr. Kevin Tabb, chief executive of Beth Israel Deaconess, said the new partnership will encourage some patients crossing the river for care at Boston hospitals to make use of their local hospitals.

“CHA will get stronger, and that will be better for patients there,” he said.

The partnership must be reviewed by the state Health Policy Commission, created by the health care cost control bill passed last summer.

Under the plan, most Cambridge Health Alliance physicians will join the Beth Israel Deaconess Care Organization, which is a so-called accountable care organization.

Such networks agree to provide all care for a group of patients. They stand to make extra money if they can provide the care efficiently and meet quality standards, but can lose money if they do not.

The larger such groups, the less their financial risk. Tabb said the partnership would increase the number of primary care physicians within the accountable care organization by about 25 percent.

The relationship will give Cambridge Health Alliance physicians and, ultimately, the hospital system itself a better bargaining position in negotiating contracts with health insurers, said chief executive officer Patrick Wardell.

That is especially important because the organization serves so many people covered by Medicaid managed care organizations, which contract with the state to provide care for the poor and disabled and pay doctors less than commercial health insurers do.

On its own, Cambridge Health Alliance doesn’t “have the size,” Wardell said in an interview. “We are hoping that we will be able to use this as a mechanism to increase” insurance payments.

Wardell also noted that the partnership will give his system’s patients better access to advanced services it does not provide, and it will allow Beth Israel Deaconess to tap into Cambridge Health Alliance’s expertise in psychiatric care.

The hospital systems will share electronic health ­records. Cambridge Health ­Alliance now uses a system made by Epic, from which Beth Israel Deaconess’s in-house system can access information.

In a memo sent to the Cambridge Health Alliance staff Thursday, Wardell noted that there is more work to do for the hospital system to become financially secure.

He called the partnership an “essential step” but not a cure-all.

Chelsea Conaboy
can be reached at
cconaboy@boston.com. Follow her on Twitter @cconaboy.
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