After vigorously opposing Partners HealthCare's expansion plans, Beth Israel Deaconess Medical Center and Lahey Health may merge to create a major rival to the Boston-based giant, the Boston Globe reports.
The deal would consolidate two formidable health systems in Eastern Massachusetts and put Partners HealthCare in the unfamiliar position of competing with a rival with nearly the same hospital market share.
Partners operates 10 hospitals across eastern Massachusetts and the system's 21.9% inpatient market share was double that of any competitor in 2012, the system told investors earlier this year. A merger of Beth Israel Deaconess and Lahey Health would create an eight-hospital system with inpatient market share of 19.6%.
That's significantly larger than the existing No. 2, Steward Health Care System, which held 13.1% of the inpatient market in 2012.
Partners, however, would still be the biggest player around. Beth Israel Deaconess and Lahey Health would have combined overall revenue of $3.2 billion and operating income of $61.8 million, based on the year that ended Sept. 30, 2014. Partners ended the same year with $10.9 billion in revenue and an operating loss of $21.6 million. (All of that loss was attributed to the system's struggling Neighborhood Health Plan.)
Partners dropped plans to acquire one hospital after losing a court fight over its acquisition agreement with state regulators. The system also suspended plans to acquire two other hospitals. Lahey and Beth Israel Deaconess were part of a coalition of providers that objected to the deals.
Talks between Beth Israel Deaconess and Lahey Health are in the early stages and the last two attempts to merge the systems fell apart, the Globe reported.
If there is a deal, it's not clear who will benefit, Alan Sager, a Boston University professor told the newspaper. “BI and Lahey are good hospitals, and in today's chaotic world of healthcare, they're scrambling, maybe through a merger, to find a way to generate higher revenue,” Sager told the Globe. “That may be good for them; it may not be good for everyone who has to pay for care.”