Things to watch now that Beth Israel-Lahey merger is official
Massachusetts now has a large new health care system: Beth Israel Lahey Health.
After years of planning, the merger between Beth Israel Deaconess Medical Center and Lahey Health becomes official Friday.
The deal includes 13 hospitals, including all of the Beth Israel system, all of the Lahey system, Anna Jaques Hospital in Newburyport, Mount Auburn Hospital in Cambridge, New England Baptist Hospital in Boston, and numerous medical offices.
The system will be nearly equal in size to Partners HealthCare, the state’s dominant health care provider and parent of several hospitals, including Brigham and Women’s and Massachusetts General.
“This has been a long time coming,” Dr. Kevin Tabb, chief executive of Beth Israel Lahey Health, said Thursday.
Very little will change right away for patients, or for the new system’s 35,000 employees.
“I don’t think people should expect we will flip a switch and everything will be different,” Tabb said. “We’re at the starting line.”
How the merger affects patients’ access to care:
Hospital leaders say patients will gain better access to a larger group of medical experts across Eastern Massachusetts — but they have yet to explain just how this will happen. It could be months or years before patients see changes.
Alan Sager, professor at the Boston University School of Public Health, said he wants to see whether the new health system uses its “enormous power and resources to address the historic areas of unmet need,” such as primary care and mental health care.
Beth Israel Lahey Health plans to place additional mental health providers in primary care practices across its network. This initiative will begin “almost immediately,” Tabb said, and eventually extend mental health services to half a million people who don’t have easy access to care now.
Combined, the hospitals that make up Beth Israel Lahey Health treat a relatively small share of low-income patients on Medicaid. Through their settlement with Attorney General Maura Healey’s office, they are now required to expand access to lower-income patients by making good-faith efforts to ensure all of their doctors accept Medicaid. They’re also required to target low-income patients with advertising. Time will tell whether this strategy works.
Since leaders of Beth Israel and Lahey announced their intent to merge two years ago, they have argued that the goal is to create a high-quality health system — but not a high-cost one. Will they keep their promise?
Sager is skeptical. “Less competition means higher prices,” he said.
Healey’s settlement requires the hospitals to adhere to price caps for seven years. Initially, they would not be allowed to increase prices more than 3 percent a year, though that limit is subject to change over time.
“When the price constraints are over, what will happen to prices?” said Nancy Kane, professor at the Harvard T.H. Chan School of Public Health.
Beth Israel Lahey Health will compete most directly with Partners, which has used its market power to extract higher payments from insurers.
The new system could try to attract patients and compete by teaming up with insurance companies and offering lower-cost coverage plans that exclude Partners hospitals. But no such plans have been announced.
How the hospitals integrate
Mergers can take many forms. Leaders of the new health system now have to decide how much to truly merge their operations, and whether to combine and consolidate certain departments or services.
Will certain medical services be consolidated at a one hospital? Will doctors across the health system report to systemwide chiefs, or will each hospital maintain its own physician leadership?
Tabb and his team also must decide how best to share patient information across the system; currently, Beth Israel and Lahey hospitals use different electronic health record programs.
After Mass. General and the Brigham combined in 1994 to found Partners, they did not eliminate or consolidate clinical departments. Both of those teaching hospitals offer many of the same services.
Kane said she’ll be watching how Beth Israel Lahey Health attempts to achieve economies of scale — while trying to avoid the kind of cultural missteps that can hamper such efforts.
“Is it just through [the] back office, or is there going to be any clinical consolidation?” she asked. “How’s that going to play out?”