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AG Healey Approves Hospital Mega-merger with Price-cap

November 29, 2018 GMT

By Michael P. Norton


BOSTON -- Attorney General Maura Healey on Thursday announced the conditions that will be placed upon the creation of Beth Israel Lahey Health System, a large care network that will rival Partners HealthCare in size.

Beth Israel Lahey Health System (BILH), which will be formed through the merger of Beth Israel Deaconess Medical Center and Burlington-based Lahey Health System, will face a seven-year price cap and $71.6 million in financial commitments over eight years to support health care services for low-income and underserved communities, according to Healey’s office.


Advocates for low-income communities had opposed the merger and the state Healthy Policy Commission, in referring it to Healey for review in September, had cautioned that the deal would likely lead to an increase in health care costs.

Under the price cap, BILH will guarantee that its price increases will be below the state’s official health care cost growth benchmark, which is currently set at 3.1 percent. Healey’s office estimates $1 billion in costs will be avoided, including $198 million in the first year, due to the seven-year cap.

The settlement, filed in Suffolk Superior Court as an “assurance of discontinuance,” features a list of “enforceable conditions,” including a requirement that BILH strengthen its commitment to MassHealth; enhance access to mental health and substance use disorder treatment across its system, and engage in joint business planning with its safety net hospital affiliates, including Lawrence General Hospital, Cambridge Health Alliance, and Signature Brockton Hospital.

“Through this settlement, Beth Israel Lahey Health will cap its prices, strengthen safety net providers across the region, and invest in needed behavioral health services,” Healey said in a statement late Wednesday morning. “These enforceable conditions, combined with rigorous monitoring and public reporting, create the right incentives to keep care in community settings and ensure all our residents can access the high-quality health care they deserve.”

[This is a developing story]