A third attempt at a merger between Beth Israel Deaconess and Lahey Health makes sense, says an industry observer, but neither health system will confirm whether talks are underway.
Maybe the third time's a charm.
Lahey Health and Beth Israel Deaconess Medical Center reportedly are making a third attempt to merge. The Boston Globe, citing four unnamed sources, reports that the merger talks are in the early stages. The two health systems tried to negotiate a merger in 2011 and again in 2014, but each time those talks collapsed.
Media sources at both health systems would neither confirm nor deny that the talks were underway.
"Lahey Health continually seeks collaborative partnerships with health care organizations that share our mission to deliver coordinated, high-quality care for our patients at an affordable cost. We cannot comment on any specific discussions," spokesman Andrew Mastrangelo told HealthLeaders Media.
Jennifer Kritz, Mastrangelo's counterpart at Beth Israel, said: "We are always open to opportunities to affiliate with providers that share our commitment to high quality, affordable care, but we don't comment on any specific discussions."
Adam Powell, a healthcare economist, and president of Boston-based Payer+Provider Syndicate, says the merger makes sense as both health systems attempt to achieve more leverage during payer negotiations, experience less ACO network leakage, and increase the feasibility of offering a proprietary health plan.
"Partners has been attempting to add hospitals to its system, and it is no surprise that Beth Israel and Lahey are attempting to do so as well. Beth Israel and Lahey have unsuccessfully attempted to merge twice before, but this time may be different. Lahey Health laid off 130 people and cut the pay of its top executives in May 2015 after having lost $21 million over the course of the fourth quarter of 2014 and the first quarter of 2015."
Were the merger to take place, the unified health system would compete in the Eastern Massachusetts market against rivals Partners HealthCare and for-profit Steward Health Care System.
"It would leave three major health systems in Greater Boston: Partners, Beth Israel/Lahey, and Steward," Powell says. "The merger has the potential to make Partners and Beth Israel even stronger competitors. Harvard Medical School's campus, the Longwood Medical Area, contains hospitals from both Beth Israel (Beth Israel Deaconess Medical Center) and Partners (Brigham and Women's Hospital). Both systems are affiliated with Harvard, and have long had an element of "coopetition." However, it is often said that Beth Israel has somewhat lower prices than Partners, and as such, it has room to increase its strength through a merger."
Powell says it's not clear how Massachusetts Attorney General Maura Healey would respond to a potential major health system merger.
"As Healey assumed office in January 2015, she did not oversee the previous merger attempts," Powell says. "It has been reported that shortly after assuming office, Healey unraveled a deal that her predecessor, Martha Coakley, had worked out to enable Partners to expand. Healey has previously expressed deep concern over the rising healthcare costs in Massachusetts, and may take action against efforts that may further increase costs."
BCBSNJ Launches Statewide OMNIA Health Alliance
Horizon Blue Cross Blue Shield of New Jersey has launched OMNIA Health Alliance, a statewide collaboration with seven health systems and a multispecialty physician group to "radically alter" the transition from fee-for-service to value-based care delivery.
Robert A. Marino, chairman and CEO of Horizon BCBSNJ, said in a media release announcing the creation of OMNIA that "significant intellectual and financial resources" would be dedicated "to change this paradigm by developing new approaches to keep individuals healthy through increased population health management and more integrated, coordinated care that rewards better health outcomes, an enhanced patient experience, and lower cost care."
"The OMNIA Health Alliance is an unprecedented collaboration that will significantly transform how health care is financed and delivered in New Jersey for the better," Marino said.
"Through the OMNIA Health Alliance, we are all making a long-term commitment with a new level of trust, cooperation, and energy that will benefit health care consumers in New Jersey."
The OMNIA health systems are: Atlantic Health System, Barnabas Health, Hackensack University Health Network, Hunterdon Healthcare, Inspira Health Network, Robert Wood Johnson Health System, and Summit Medical Group.
Premier Health, IUH Open Urgent Care Centers
Baton Rouge, LA-based Premier Health has announced the opening of the first of 12 urgent care centers in Indianapolis in partnership with Indiana University Health.
By year's end, Premier Health will operate 38 centers in three states and a workforce of more than 650 people. Premier Health CEO, Steve Sellars says the company will double in size over the next three to five years.
"There has been a nationwide shift to less-expensive, cost-effective healthcare models, and large health systems want to partner with an urgent care company that has a successful track-record of partnering with hospitals," Sellars said in a media release. "These types of joint-ventures are Premier Health's core business. We've done more of them than almost any other company of our kind in the country."
Ron Stiver, president of clinical services at IU Health, said "teaming up with Premier made sense because of the company's demonstrated expertise in partnering with health systems to launch and operate urgent care centers."
The clinics in Indianapolis will operate as IU Health Urgent Care.
John Commins is the news editor for HealthLeaders.