Beth Israel Deaconess Medical Center in Boston and Lahey Health in Burlington, Mass., have signed a letter of intent to merge.
The merger would create the second-largest health system by revenue in Massachusetts, the Boston Globe reported. The combined system would include eight hospitals and $4.5 billion in annual revenue.
Lahey operates four hospitals and reported $1.6 billion in revenue in fiscal 2014. Beth Israel also operates four hospitals—its flagship hospital that is affiliated with Harvard Medical School and three community hospitals.
Boston-based Partners HealthCare still dominates the state's market as the largest provider with 10 hospitals and $12.5 billion in revenue at the end of fiscal 2016.
This is not the first attempt by Beth Israel and Lahey Health to merge in an effort to better compete against Partners HealthCare. The systems began talks to merge in 2011, but plans fell through.
The merger will offer care in communities throughout eastern Massachusetts.
Under terms of the deal, Dr. Kevin Tabb, current CEO of Beth Israel, will assume the role of CEO of the combined system. Ann-Ellen Hornidge, current chair of Lahey Health, will serve as chair of the combined system. In addition, the board will have equal representation from both Beth Israel and Lahey Health.
The deal is subject to state regulatory approval.
“A combined system would be built on shared values and a mutual commitment to advancing care through research and education,” Tabb said. “Together, we would offer patients comprehensive, coordinated services across complementary geographies and help contain rising healthcare costs.”