Tufts-Hallmark deal OK’d by state watchdog agency

Tufts Medical Center in Boston is seeking to merge with Hallmark Health.David L Ryan, Globe Staff/Globe Staff

The proposed merger of Medford’s Hallmark Health System and the parent company of Tufts Medical Center took a step closer to completion on Thursday after a state watchdog blessed the deal, saying it would not put upward pressure on health care costs.

In fact, the state Health Policy Commission said the merger is likely to decrease hospital market concentration and may reduce costs by directing more patients away from higher-priced Boston hospitals.

“The transactions are unlikely to increase Hallmark hospital and physician prices or negatively impact access or quality of care,” commission spokesman Matthew Kitsos added.

The commission decided not to conduct a detailed review, effectively giving its approval the deal between Hallmark and Wellforce, the parent company of Boston’s Tufts Medical Center and Lowell General Hospital. The Hallmark doctors group also plans to join the Tufts physician network.

The commission is a state agency that develops policies to contain the growth in medical spending and improve patient care. Hallmark and Wellforce are still awaiting approvals from the state Department of Public Health and federal regulators. They expect to complete the deal by early 2017.

“This is an important milestone as we move forward with joining this innovative organization that shares our commitment to providing high quality, cost effective community health care,” Hallmark spokesman Rob Brogna said.

Wellforce spokeswoman Brooke Hynes said the merger will “allow us to enhance and expand health care services in the community while continuing to work toward decreasing the overall cost of care.”

Hallmark, which owns Melrose-Wakefield Hospital in Melrose and Lawrence Memorial Hospital in Medford, had spent three years planning a tie-up with Partners HealthCare, the state’s largest health care system. But that fell apart in December after the Health Policy Commission and others raised concerns that that deal would increase health spending and increase Partners’ market power.