The merger of two prestigious multispecialty group practices in New England creates a force of 830 physicians in 52 locations and a combined revenue base of more than half a billion dollars a year.
Last week's announced union of the Lahey Clinic, based in Burlington, Mass., and the Hitchcock Clinic, based in Lebanon, N.H., also demonstrates how managed-care contracting and access to primary care are influencing the strategies of specialty medical practices.
Both organizations have been destinations for tertiary care since the 1920s, but in recent years they've been adding primary-care physicians and building a regional presence.
Hitchcock, which is affiliated with Mary Hitchcock Memorial Hospital in Hanover, N.H., and Dartmouth Medical School, began a decade ago to develop primary-care practices in southern New Hampshire, hours away from its midstate roots. The current network also includes eight sites north of Lebanon and nine in Vermont.
Since 1990, Lahey has been extending its reach throughout northeastern Massachusetts, establishing offices in seven Boston suburbs and forming a primary-care physician network with Harvard Community Health Plan, New England's largest HMO. Lahey operates Lahey Clinic Hospital in Burlington, Mass.
The newly named Lahey Hitchcock Clinic becomes the third-largest group practice in the nation behind the Mayo Clinic in Rochester, Minn., and Henry Ford Health System's group practice. But the size is not as important as the organization's geographic reach and integrated structure, said John Collins, chief executive officer of the Hitchcock Clinic. He becomes executive vice president and chief operating officer of the merged organization.
About 75,000 New Hampshire residents are employed in Massachusetts, while 10,000 Massachusetts residents go to work in New Hampshire, Mr. Collins said. "Major employers don't recognize state boundaries," he said, and now the merging medical organizations can fuse into a "chassis" upon which to "further develop their distributed system" of regionally accessible services.
Geography also worked against the strategy of using primary-care physicians as referral sources for the core specialty practice. "Many people (from New Hampshire) working in Massachusetts look to the Boston area for their higher tertiary care," said Kevin Stone, CEO of Hitchcock's southern region.
Lahey's Burlington headquarters, located at an interstate-highway hub between Boston and the border, is more accessible than Hitchcock's specialty concentration in Lebanon, he said.
From points south and east in New Hampshire, it's also easier to go to Boston than to the state's interior.
Meanwhile, Lahey was aware that it had a sizable patient base in southern New Hampshire and wanted a larger presence there, said Douglas Harding, Lahey's senior vice president, who will hold that same position in the merged organization.
Mr. Collins said Lahey and Hitchcock up to now had not competed much along the border, but both had similar network expansion strategies that eventually could have crossed paths. The decision to merge will combine resources instead of duplicating them, which will be significant as the demand for capital increases, he said.
Messrs. Collins and Stone are among four officers who will constitute an "office of the CEO" at Lahey Hitchcock. Bruce Steinhauer, M.D., CEO and board chairman of the Lahey Clinic, becomes CEO of the new organization. Stephen Plume, M.D., president of Hitchcock Clinic, will hold that position with the merged unit.