Beth Israel Deaconess Medical Center (BIDMC) and Lahey Health have announced they will try, for the fourth time, to combine their forces and create one single entity, as an attempt to better compete with Partners HealthCare. The system would be led by Dr. Kevin Tabb, who is the current CEO of Beth Israel Deaconess Medical Center.
It is the fourth time in the past six years that these two major systems are trying to merge. Should this attempt be successful, the system will be the largest hospital merger in Massachusetts since the mid-1990s.
Beth Israel And Lahey Health Could Finally Merge
"We are engaged in ongoing discussions, exploring the opportunity to combine our two systems and create the region's premier integrated health care delivery system, one that would offer patients exceptional care and unparalleled value, while keeping care in the community whenever possible," noted Tabb in a statement.
According to the administrators of the two systems, the networks have complementary advantages and should work well together. While Lahey has one of the biggest behavioral health divisions in the United States and a hospice program, BIDMC is more focused on research and teaching. As SVP and general counsel for BIDMC, Jamie Katz believes that once the two networks are united, it will be able to offer a full range of services in complementary geographic areas.
What these both systems have in common is their positioning statement on the market. Their official declaration is that they deliver qualitative services that can compete with Partners HealthCare, the largest system in the state, but at lower prices.
However, not everybody is as optimistic about this possible union as the administrators of the two health care providers, especially since there is no guarantee that the overall decrease in the administrative costs will stop the leaders of the union from charging more for their services.
"Every merger means fewer competitors and more leverage for the parties that merge to squeeze higher prices and premiums out of everybody who lives or works or does business in Massachusetts," noted Alan Sager, a professor of health law, policy and management at the Boston University School of Public Health.
Fourth Time's The Charm?
When the affiliation of Partners HealthCare was created, Beth Israel was invited to be part of it. However, the company refused and partnered with Deaconess-Hospital, hoping that it will create the necessary leverage for a close competition on the market. As sources report, this initial merge wasn't a very successful one from the start, partly because of the major differences in the vision of the two hospitals.
The first time the information was made public concerning a possible union between Beth Israel and Lahey was in 2011 when a deal fell through. Both the systems were interested in building their own network to compete against the Partners, and a union would have made sense.
In 2014, a merger of the two systems with Atrius Health was made public. Although geographically speaking it made sense, due to the different areas the companies covered, the merger never happened.
Then, in October 2015, another attempt failed yet again. Despite the efforts, the two entities were not able to unite the first three times. Should they go through with the merger this time, the health care system would undergo a significant change.
