Partners HealthCare, the state’s largest health system, is poised to get even bigger, after two state regulators said they wouldn’t block its acquisition of Massachusetts Eye and Ear despite concerns the deal could raise health care costs for consumers.
The blessings from regulators are a welcome victory for Partners, which has faced intense scrutiny in its efforts to expand within the state.
Attorney General Maura Healey said Friday that she would not sue to stop Partners’ takeover of Mass. Eye and Ear, a specialty hospital with which it already shares a close affiliation.
“Our office has reviewed the transaction and
. . . sees no basis under antitrust law for filing a lawsuit to stop this merger,” said Emily Snyder, a Healey spokeswoman, in a statement.
But the attorney general shares concerns raised by the state Health Policy Commission, a watchdog agency, that the transaction could raise health care costs, Snyder said. Partners owns 10 hospitals in the state, including Massachusetts General and Brigham and Women’s, among the priciest hospitals in Massachusetts.
In addition to the attorney general’s statement of support, the Department of Public Health has recommended conditional approval of the merger. A key condition is that Partners does not raise rates for Mass. Eye and Ear’s medical services more than the state’s target for containing health spending, which is currently 3.1 percent a year.
The state’s Public Health Council must vote on the DPH staff recommendation — considered likely — before Partners can complete the deal. The vote is expected on Feb. 14.
Partners spent years planning acquisitions of South Shore Hospital in Weymouth and Hallmark Health System of Medford, but in 2014, the Health Policy Commission warned that those deals would increase health spending by as much as $49 million a year.
The deals drew opposition from rival hospitals and insurers, and ultimately from Healey, who threatened a legal challenge based on antitrust grounds. Partners eventually abandoned both transactions and shifted its focus to trying to expand outside of Massachusetts.
Last November, the Health Policy Commission, which studies hospital mergers, warned that the proposed deal between Partners and Mass. Eye and Ear also could raise spending — as much as $61.2 million a year — if Partners used the transaction to raise prices for services at Mass. Eye and Ear.
“These spending increases would ultimately be borne by consumers and businesses through higher commercial premiums,” the commission’s report said.
The commission cannot block mergers, but it referred its cost concerns to Healey and to the Department of Public Health, which have greater regulatory powers.
The merger plan has not triggered the kind of firestorm of opposition that Partners faced a few years ago.
Partners spokesman Rich Copp said Friday that the organization appreciates the attorney general’s assessment and will continue to work with public health officials in the coming weeks.
“We believe that moving this transaction forward will strengthen the clinical and scientific relationships between our organizations and create long-term efficiencies and value that will help make Mass. Eye and Ear services and research accessible to a broader population of patients,” he said.
Executives at Mass. Eye and Ear have argued that the hospital needs to join a larger health system in order to thrive. The hospital has been losing money for several years, even though it enjoys a strong reputation for treating ailments of the eyes, ears, nose, and throat.
Spokeswoman Jennifer Street on Friday said hospital officials are pleased with the attorney general’s support and hope the Public Health Council also will vote to approve the merger.
“As we have said before, this transaction will allow Mass. Eye and Ear to take care of patients and conduct research for many years to come,” she added.
The deal was first announced a year ago.
Mass Eye and Ear was founded in 1824. Along with its building in Boston, Mass. Eye and Ear has 17 other locations in Massachusetts and one in Rhode Island. Only those patients with the most complex cases stay the night in the hospital’s 41 patient beds. Its doctors perform about 90 surgeries a day.