Business & Tech

Tufts hospital CEO criticizes planned Beth Israel-Lahey merger

Beth Israel Deaconess and Lahey Health have argued that their merger will draw patients away from the higher-priced Partners HealthCare network.
David L. Ryan/Globe staff/file
Beth Israel Deaconess and Lahey Health have argued that their merger will draw patients away from the higher-priced Partners HealthCare network.

The chief executive of Tufts Medical Center on Tuesday criticized the proposed merger of Beth Israel Deaconess Medical Center and Lahey Health, arguing that the deal would increase costs and widen health care disparities.

Tufts, a teaching hospital in Boston’s Chinatown neighborhood, competes with Beth Israel Deaconess and Lahey, but it serves a much higher share of patients on Medicaid, the government health program for poor and low-income individuals.

Beth Israel Deaconess and Lahey executives have argued that their merger will benefit all populations of patients, including the poor, and that it will attract patients away from the higher-priced Partners HealthCare network, helping to contain statewide medical spending.

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“This is a false argument,” Dr. Michael Wagner, the Tufts chief executive, said at a Boston City Council hearing Tuesday. “The new combined Beth Israel-Lahey system would likely siphon the remaining commercial patients from non-Partners hospitals, community health centers, and physicians.’’ This possibility is more likely to occur than the argument being proposed that they will move market share from Partners.”

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Wagner’s comments Tuesday marked the first time a competitor has publicly criticized the Beth Israel Deaconess-Lahey merger. City councilors also invited executives from Steward Health Care System, another rival system. But no one from Steward showed up to testify.

Wagner said the merger would create a “duopoly” in which the new health system and Partners — the parent of Massachusetts General and Brigham and Women’s hospitals — would dominate the local hospital market. He argued that the Beth Israel Deaconess-Lahey system would raise prices to attract doctors and gain market share.

“I have great respect for these two organizations, but I have grave concerns about what the merger of these two systems could do to health care costs and access,” Wagner said.

Hanoi Reyes, a spokeswoman for the Make Healthcare Affordable Coalition, which opposes the merger, said the deal represents a threat to community hospitals that serve diverse and low-income populations.

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“By joining together, they are forming a second Goliath in the market,” said Reyes, whose group represents community members and is backed by the consulting firm Northwind Strategies.

Beth Israel Deaconess and Lahey are leading what would be the most significant hospital deal in Massachusetts in decades. It would encompass 13 hospitals, including the Beth Israel Deaconess community hospitals, the Lahey community hospitals, New England Baptist Hospital in Boston, Mount Auburn Hospital in Cambridge, and Anna Jaques Hospital in Newburyport.

The merger received approval last week from the state Public Health Council, but it is still under review by Attorney General Maura Healey, the Federal Trade Commission, and the state Health Policy Commission, which studies the cost implications of health care transactions.

Representatives from Beth Israel Deaconess and Lahey made their case for the merger in front of city councilors, who held a public hearing even though they have no authority over the deal.

David Spackman, general counsel at Burlington-based Lahey, said the transaction will provide needed new competition in the local health care market.

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“BI and Lahey have been in discussions about this possibility for three years,” he said. “We had the opportunity to create a system that would . . . provide all citizens of Eastern Massachusetts access to a high-quality, very much lower cost system.”

City councilors said they wanted to learn how the merger would affect the poor, the elderly, and communities of color. They asked hospital executives to explain the impact of the transaction on the thousands of people the hospitals employ.

“There are not going to be any layoffs to people who touch patients,” Spackman replied.

Dr. Stan Lewis, the chief system development and strategy officer at Beth Israel Deaconess, added: “We expect to grow, we expect to expand services.”

The merger has not yet generated the kind of public opposition that emerged several years ago when Partners, the state’s largest health system, was planning to acquire three community hospitals. At the time, rival health care providers — including Tufts, Beth Israel Deaconess, and Lahey — joined together to oppose Partners’ expansion, and Partners eventually dropped the deals.

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