Joslin Diabetes Center, a specialty clinic and research organization in Boston’s Longwood Medical Area, is in discussions to be acquired by the Beth Israel Lahey Health system, the latest move in an ever-consolidating health care market.
Leaders of the two organizations said Thursday that they are negotiating a deal and hope to reach a definitive agreement soon. The deal needs approval from regulators before it can be completed.
“Joslin’s place for the future is secure by coming into the larger network,” said Dr. Kevin Tabb, chief executive of Beth Israel Lahey Health. “This really ensures that Joslin will continue to be around for a long time.”
Joslin serves about 20,000 patients with diabetes and already has clinical and research ties to Beth Israel Deaconess Medical Center, the biggest hospital in the Beth Israel Lahey system. Both are affiliated with Harvard Medical School.
Dr. Roberta Herman, chief executive at Joslin, said the deal would allow the center to expand and improve care to patients across the Beth Israel Lahey system, which serves 150,000 people with diabetes.
“Diabetes is an absolute epidemic,” she said. “It can’t possibly be managed alone at this point by endocrinologists.”
Herman, who became CEO of Joslin in January after almost four years running the state’s Group Insurance Commission, said Joslin’s board has considered a deal like this for years.
Joslin provides outpatient care; it is not a hospital. And while its specialty, diabetes, is a significant and widespread condition, it’s not a lucrative segment of health care because it doesn’t involve expensive procedures, noted David E. Williams, president of the consulting firm Health Business Group.
Williams said a deal with Beth Israel Lahey could help Joslin draw patients and is likely not big enough to worry regulators.
“There’s a question about if Joslin really could be viable on its own,” he said.
Like many Boston health care institutions, Joslin has a long history, dating back to 1898. It employs roughly 500 people, about half of them in research.
This year, amid the coronavirus pandemic, Joslin’s physicians have pivoted to treating patients mostly through telehealth.
With about $80 million in annual revenue, Joslin would be among the smaller members of the $6.3 billion Beth Israel Lahey Health system.
Beth Israel Lahey Health was founded in March 2019 through the merger of Beth Israel Deaconess Medical Center, Lahey Hospital & Medical Center, and several other hospitals. It is the second-largest health system in Massachusetts after Mass General Brigham.
The original Beth Israel-Lahey merger raised concerns about how the transaction would affect health care costs and competition, but Tabb said he doesn’t expect such concerns with the new deal.
“We think this is something that makes sense and is a natural next step,” he said.
In 2018, another specialty health care institution, Massachusetts Eye and Ear, was acquired by Mass General Brigham (then called Partners HealthCare).