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Northampton hospital, MGH to pursue merger

Trustees at Cooley Dickinson Hospital in Northampton have voted to negotiate a merger with Massachusetts General Hospital, an alliance that would extend the reach of Mass. General and its powerful parent, Partners HealthCare, beyond Eastern Massachusetts.

The deal could send more Cooley Dickinson patients to Boston to receive treatment for cancer, heart disease, and other conditions, boosting Mass. General traffic at a time when it is under pressure from lower-cost competitors. It might also take business away from Baystate Health, the Springfield health care system that now treats patients referred by Cooley Dickinson and had hoped to acquire it.

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Under the proposed affiliation, the 140-bed Northampton hospital would become a subsidiary of Mass. General, a Harvard-affiliated teaching institution and founding member of Partners, the state’s largest medical care provider. Cooley Dickinson already has joint clinical programs with MGH, offering care for cancer and stroke patients.

“They’re a very high quality community hospital,’’ Mass. General president Peter L. Slavin said of Cooley Dickinson. “They’re certainly interested, as we are, in making care not only better but more affordable.’’

Cooley Dickinson chief executive Craig Melin said teaming up with Mass. General would benefit patients in the Pioneer Valley. “This will improve the coordination of care for patients who need the most complex care,’’ he said.

A deal would require approval from state regulators, including Attorney General Martha Coakley and the Department of Public Health. Already, critics are questioning whether an alliance of two health care organizations that for years have received some of the state’s highest insurance payments will mean lower prices for patients and employers.

“There may be some positives in the form of convenient referrals,’’ said Alan Sager, professor of health policy and management at Boston University. “But there may be more efforts to vacuum patients into Boston and to capture more patients for Mass. General itself. And it may mean that Cooley would be able to raise prices. Partners would be able to negotiate with insurers on behalf of Cooley, and they have leverage.’’

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Baystate Health said that its executives were “extremely disappointed’’ by Cooley-Dickinson’s decision. “It is of deep concern to us that local control of one of the region’s most important community assets may be transferred to a large Boston hospital corporation,’’ said Robert B. Steele Jr., chairman of Baystate’s board of trustees.

The merger would add to a wave of consolidations that has been reshaping the state’s health care industry over the past two years. Last month, Boston’s Beth Israel Deaconess Medical Center, another Harvard hospital, said it had completed its takeover of 81-bed Milton Hospital. Partners already owns nine hospitals in Eastern Massachusetts, while for-profit Steward Health Care System owns 10.

Lynn Nicholas, president of the Massachusetts Hospital Association, said the mergers are an effort by hospitals to position themselves for an era of coordinated care and fixed insurance payments that is being fueled by changes in the industry and new laws. “It’s an effort to drive costs down and have better resources to drive quality,’’ she said. “Hospitals can’t be successful if they’re not cost effective in the environment we’re now in. This consolidation is a proactive step to make sure hospitals can survive.’’

In a statement, the would-be merger partners said: “We expect the attorney general to look carefully at the merger in light of concerns about the prices at both Mass. General and Cooley Dickinson.’’

Another question likely to be considered by regulators is whether combining the hospitals would limit competition.

“We are aware of the proposed agreement, and will certainly review it for compliance with antitrust laws,’’ said Brad Puffer, a spokesman for the attorney general’s office.

Cooley Dickinson, founded in 1886, operated independently until 1993 when it joined the Dartmouth-Hitchcock alliance, based in Lebanon, N.H. That hospital system disbanded at the end of 2008, and Cooley Dickinson soon began weighing whether another affiliation made sense.

“We ultimately concluded that, in this world, we needed to partner,’’ Melin said. “There were too many changes going on, and we needed the economies of scale to make it.’’

Cooley Dickinson talked with seven potential partners: Mass. General, Brigham and Women’s, and Beth Israel Deaconess in Boston; Baystate in Springfield; Lahey Clinic in Burlington; UMass Memorial Medical Center in Worcester; and Nashville-based Vanguard Health, a for-profit system that operates hospitals in Framingham and Worcester. It narrowed the field to Mass. General, and Baystate, the dominant health care provider in Western Massachusetts.

Some members of an affiliation task force at Cooley Dickinson worried that competition in the Pioneer Valley would be reduced if their hospital teamed up with Baystate. Meanwhile, Cooley Dickinson physicians who worked on clinical programs with Mass. General favored the Boston hospital over Baystate. “The physicians here in Northampton are looking forward to an expanded relationship with the physicians at Mass. General,’’ said Cooley Dickinson medical staff president Margaret Russo.

Cooley Dickinson’s trustees voted Monday to join Mass. General, which now has two other hospital subsidiaries, Martha’s Vineyard Hospital and Nantucket Cottage Hospital. Cooley Dickinson and Mass. General will now negotiate exclusively on a merger agreement, conduct due diligence, and submit the deal for regulatory approval, a process Cooley Dickinson officials expect to take six to nine months.

“We’re looking forward to bringing our hospital together with Mass. General and what it means for our community - increased quality for our patients and preserving Cooley Dickinson as an institution,’’ said Matthew Pitoniak, chairman of the hospital’s board of trustees.

Still to be worked out are referral arrangements for complex health care, how Mass. General specialists will work with their Cooley Dickinson counterparts, and how to coordinate bond financing, group purchasing, information technology, and administrative operations.

MGH’s board would have to approve the alliance. “This is not about becoming a bigger organization,’’ said Slavin. “It’s about an opportunity to have an impact on the health care of people in another part of the state.’’ While a vote of the Partners board would probably not be required, “we’d certainly want Partners’ support on this,’’ he said.

Slavin said Mass. General’s collaboration with Cooley Dickinson dates to 1965, when a Mass. General surgeon, W. Gerald Austen, performed the first repair of a ruptured heart valve in a patient referred to the Boston hospital by Cooley Dickinson.

Robert Weisman can be reached at weisman@globe.com.

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