Lahey + Beth Israel: Is bigger better?


Even with all the uncertainty surrounding health care and the Affordable Care Act, Lahey Health and Beth Israel Deaconess Medical Center are convinced bigger is better.

The two hospital systems, who have flirted several times in the past, announced on Monday that they intend to fully integrate their operations. Many details remain to be worked out before the deal is submitted to regulators for approval, but some of the key decisions have already been made.

Kevin Tabb, the CEO of Beth Israel, will run the combined system and Howard Grant, the head of Lahey, will step aside. Ann-Ellen Hornidge, the chair of Lahey (and chair of MassINC, the publisher of CommonWealth), will become chair of the combined hospital system. No word on whether the combined system will have a new name.

The combined system will bring together Beth Israel’s hospitals in Boston, Milton, Needham, and Plymouth with Lahey’s hospitals in Burlington, Beverly, Gloucester, and Winchester. The two hospital networks employ a total of nearly 29,000 workers and generate $4.5 billion in revenue and would become the state’s second-largest hospital system if the marriage is consummated.

The truth is no one knows whether bigger is truly better, whether size will help contain or drive up costs. But the match gives the two hospital systems a better chance of playing defense against the much larger Partners HealthCare system, which operates 10 Massachusetts hospitals and has $12 billion in revenues. Partners itself recently announced plans to acquire the Massachusetts Eye and Ear Infirmary.

Even more important, the marriage of Lahey and Beth Israel has the potential to offer patients a much broader health care network, which is important in an environment where providers are being asked to provide care within set budgets.

Lahey has demonstrated a willingness to use its size wisely by shifting care to lower-cost settings when appropriate. For example, in 2014 Lahey acquired Winchester Hospital. Since then, discharges from Winchester, a lower-cost community hospital, have gone up, while falling slightly at Lahey, a more expensive teaching hospital. “Directionally, this is exactly what we want to see,” said David Seltz at a meeting of the Health Policy Commission earlier this month. Seltz is executive director of the commission, one of the regulatory agencies that will be tasked with reviewing the proposed merger.



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