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Watchdog likely to review expansion bid by Beth Israel group

The entrance to Beth Israel Deaconess Medical Center in Boston, in 2014.
The entrance to Beth Israel Deaconess Medical Center in Boston, in 2014. Steven Senne/Associated Press

The state’s health care watchdog agency will likely scrutinize an expansion plan by a network of doctors and hospitals affiliated with Beth Israel Deaconess Medical Center to determine whether it will drive up costs for consumers.

It would be the first such review since the Health Policy Commission objected last year to Partners HealthCare’s proposed acquisitions of two hospital systems. Those reports ultimately contributed to Partners, the state’s largest and priciest health system, dropping one deal and putting the other on hold.

Beth Israel Deaconess Care Organization, or BIDCO, is a group of 2,400 doctors and seven hospitals that contract together. It notified the commission in October that it plans to add two hospitals to its network: New England Baptist Hospital of Boston and MetroWest Medical Center of Framingham. The commission is expected to vote Wednesday to launch a detailed analysis of the proposed affiliations.

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“The HPC will objectively examine all aspects of the proposed transactions in order to better understand the impact of these transactions and the growth of the BIDCO system on costs and market functioning, including both the opportunities and challenges presented by the proposed changes,” said Matthew Kitsos, spokesman for the commission.

After the review, which will take several months, the commission will issue a public report detailing any concerns. The agency cannot block deals, but it can ask the attorney general to review transactions that it believes are bad for consumers.

The Health Policy Commission’s report on Partners’ proposed mergers helped persuade Attorney General Maura Healey to oppose the deals and a judge to reject a plan that would have allowed them to proceed.

BIDCO, founded three years ago, is an accountable care organization that negotiates contracts with insurers, then gives providers a set budget under which to manage patient care.

To meet their budgets, health care organizations must make sure patients get regular screenings and vaccinations, keep blood pressure under control, and follow many other measures to try to prevent serious illness. When providers come in under budget and achieve high quality scores, they can keep the savings.

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BIDCO’s network includes Beth Israel Deaconess Medical Center in Boston and three community hospitals owned by Beth Israel Deaconess in Milton, Needham, and Plymouth. It also includes Lawrence General Hospital, Anna Jaques Hospital in Newburyport, and Cambridge Health Alliance, which runs hospitals in Cambridge, Somerville, and Everett.

In public filings, BIDCO said that expanding its network would help improve medical care by bringing the expertise of more providers under one organization and by allowing better sharing of patient data. That would help control health care costs, BIDCO argues.

Affiliating with MetroWest Medical Center and New England Baptist Hospital will “advance the Commonwealth’s goal to improve health care quality and efficiency,” Jeffrey Hulburt, chief executive of BIDCO, added in a statement.

New England Baptist specializes in orthopedic care, such as knee and hip replacement surgeries. MetroWest Medical Center is one of the few for-profit hospitals in Massachusetts, owned by Dallas-based Tenet Healthcare Corp.

Although the proposed deals are not traditional mergers, they would closely align two significant hospitals with BIDCO and extend the organization’s reach west of Boston.

“You have one of the major Boston-based organizations now moving into MetroWest,” said Matthew R. Fisher, a health care lawyer at Mirick O’Connell in Worcester. “That kind of expansion into a new region could be one of the trigger points” for the Health Policy Commission to launch a review, because it represents a significant geographic expansion, he said.

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Leemore S. Dafny, an antitrust expert and professor at Northwestern University, said it’s right for the commission to look into affiliations that involve joint contracting and close sharing of information.

“This type of collaboration can be anticompetitive under certain circumstances,” Dafny said.

The Health Policy Commission, created through a 2012 state law, has so far done reviews of mergers proposed by Partners of Boston and Lahey Health of Burlington. The analysis of Lahey found that its acquisition of Winchester Hospital had the potential to cut medical spending. But the commission found that Partners’ planned takeover of South Shore Hospital in Weymouth and Hallmark Health System in Medford would raise spending as much as $49 million a year while increasing Partners’ market power.

Partners dropped the South Shore Hospital bid earlier this year and has put the Hallmark deal on hold.


Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.