What’s going on in the metropolitan Boston healthcare market these days? A lot. Among other things, major consolidation continues to advance in that market. Indeed, one proposed merger involving 13 area hospitals, is causing considerable discussion—as well as some dissension—in that market.
To wit, the Associated Press published an article on July 19 that included this reporting: “A state watchdog group says a proposed merger between two major Massachusetts hospital systems could drive up health care costs in the state more than $250 million per year. The Health Policy Commission's report released Wednesday says a merger of Beth Israel Deaconess Medical Center and the Lahey Health System could mean $191 million more per year for inpatient, outpatient, and primary care services and almost $60 million more per year for specialty physician services,” the report added. “The higher costs would be passed on to insurers, employers, and consumers. The commission does not have the authority to prevent the merger, which would also include New England Baptist Hospital in Boston, Mount Auburn Hospital in Cambridge, and Newburyport's Anna Jaques Hospital.”
And just the day before, on July 18, The Boston Business Journal reported this: “The state's health care watchdog has strongly criticized a proposed mega-merger between Lahey Health, Beth Israel Deaconess Medical Center and three community hospitals, saying the deal would raise health care spending by $168 million to $251 million. At a Health Policy Commission hearing on Wednesday, commission staff said they had reviewed the proposed merger between Lahey, BI, New England Baptist Hospital, Anna Jaques Hospital and Mount Auburn Hospital, and found that the group would create a second mammoth health system in the state that could enact higher prices in negotiations with commercial insurers. The findings are detailed in a preliminary report the commission voted to release to the public Wednesday afternoon,” the Boston Business Journal’s Jessica Bartlett wrote. “The hospitals must now address the concerns before the commission issues a final report in 30 days.” And she quoted Stuart Altman, chairman of the commission, in saying that “There's a lot of good things in this merger, but our choice (between) letting it go forward (and) not trying to make this a win/win, I find unacceptable. I'd say to the parties: To the extent you can come forward with some help in reducing the likelihood of price increases, we would all be better served."
But the Boston Globe’s Priyanka Dayal McCluskey reported on March 7 that “Led by Beth Israel Deaconess Medical Center and Lahey Health, the hospitals say that by joining forces they can provide high-quality care to patients across Eastern Massachusetts at a lower cost than does Partners, the state's largest health care network. Beth Israel Deaconess and Lahey announced their merger plans in early 2017, after years of on-again, off-again talks,” McCluskey noted. “he deal grew to encompass New England Baptist Hospital in Boston, Mount Auburn Hospital in Cambridge, and Anna Jaques Hospital in Newburyport, and includes about 4,300 physicians. Partners owns Massachusetts General Hospital, Brigham and Women's Hospital, and nine other hospitals, and has about 6,000 doctors.” And she quoted Leemore S. Dafny, a health care economist at Harvard Business School, who told her, “This is a play to really change the dynamics of the market. It's a big play."
And in a June 12 article, McCluskey quoted Dr. Kevin Tabb, chief executive of Beth Israel Deaconess Medical Center, which evolved from [a] shaky start in 1996 to become a profitable and reputable Harvard-affiliated health care provider, as saying that "Cultural differences can be either the downfall of a merger— or, if you embrace them, can really be to the benefit of all.” McCluskey noted that “The proposed merger of Beth Israel Deaconess and Lahey is very different from the earlier deal,” which had created Beth Israel Deaconess Medical Center. This time, she noted, “The health systems are based about 20 miles apart — in Boston and Burlington, respectively — rather than across the street from each other. And, critically, their merger is not coming as a surprise. Executives negotiated on and off for years before unveiling their plans in January 2017. New England Baptist Hospital in Boston, Mount Auburn Hospital in Cambridge, and Anna Jaques Hospital in Newburyport also joined the merger last year.”
McCluskey went on to note that “The deal received one key state approval in April, and other state and federal approvals are pending. Many aspects of the Beth Israel Deaconess-Lahey merger are unknown, including how much the systems will combine operations and how that will affect patients. Post-merger, there could be conflicts between the hospitals and their staffs that no one has foreseen. But the two hospital companies are taking steps now to bridge the differences in their corporate cultures and to reduce worry about the merger,” she added. “Executives and hundreds of other staff from the hospitals are holding frequent "integration planning" meetings. This includes doctors and nurses, as well as corporate employees in departments such as finance and legal.”
Also, she noted, “Beth Israel Deaconess and Lahey already have agreed to make Tabb the chief executive of their new company — to be called Beth Israel Lahey Health — avoiding a potential leadership fight. The two health systems will have equal numbers of seats on the board of the company. But over time, the board will try to eliminate those factions; board members will not be required to come from any particular hospital.”
In a recent interview with Healthcare Informatics Editor-in-Chief Mark Hagland, Barbara Spivak, M.D., President and CEO, Mt. Auburn Cambridge Independent Practice Association (MACIPA), offered her perspectives on elements of the merger, in the broader context of what’s happening across the New England region. The Brighton-based MACIPA, which encompasses 500 affiliated physicians, operates an accountable care organization (ACO) that is a participant organization in the Medicare Shared Savings Program (MSSP). Below are a few excerpts from that interview.
One of the things happening now in New England and across the U.S. healthcare system is a blurring of the lines between providers and health plans, correct? How does that also play into this situation in the Boston metro area?
I think there’s been a definite blurring of the lines, with Partners buying Neighborhood Health Plan, a Medicaid plan, and they got rid of the Medicaid element, and made it a commercial health plan. And then it became the insurance plan for their 100,000 employees. That’s a blurring of the lines. And on top of that, they’re trying to buy Harvard Pilgrim, and you have you presume that it’s they want the geographic distribution to help them to extend into Rhode Island, New Hampshire, and Maine, where Neighborhood isn’t licensed. You look at Blue Cross Blue Shield of Massachusetts, and it gives the organizations that take risk with it, a great deal of data. But the only ones that succeed are the ones that produce their own data as well.
We have our own data warehouse, and as 13 hospitals are looking to merge, one of the key pieces for success will be not just data analytics, but how will all the diverse electronic records connect, so that data can seamlessly go through. And how will they connect with home healthcare agencies, palliative care agencies, and what data will they produce?
How might the proposed merger activity affect you and your colleagues at MACIPA?
Our IPA is in a very interesting and unusual position, because our hospitals is one of the hospitals that’s merging. About half of our doctors are in fact employed by the hospital and half are in private practices. And so we are affiliating, not merging. We can’t merge, because we are an independent organization with our own board and bylaws. But we will clearly be an affiliate, because Mt. Auburn Hospital is, and it’s our hospital affiliate. But look online at the Globe, and there’s been a whole lot of coverage about the 13 hospitals that are trying to get permission to merge, from the state and the FTC. The Attorney General approve.
Do you think the merger will ultimately be approved?
I think so. They’ve put a lot of time and money into the effort to get it approved.
Would the approval be a good thing for your organization?
I would hope it would be good for us; I would hope they would be able to provide us with some things we can’t provide ourselves. We’re in Cambridge and Belmont, in this mixed suburban/urban area. Lexington is 10 miles away, but in rush hour, that could be a half-hour drive. And so care management and sophisticated data analytics, are very important for us. And a lot of our patients still go to the more expensive hospitals like the General and the Brigham, and if they do this right, the hope is that they’ll be more competitive.
How are physicians feeling about everything that’s going on right now in the Boston metro market?
Physicians are—there’s a whole lot of discussion about burnout and physicians being unhappy with the practice of medicine. And I think when you look at physicians in private practice or employed, in their day-to-day world, physicians are asking, how is this going to make my life better and make it easier to take care of patients? That’s a prominent feeling among both. Private practice docs feel like they have a little bit more control, because they can control their staff and work-life balance—but even they, because it’s so hard to keep their income up to expectations, and overhead is so high, are feeling challenged right now.
When did you join the MSSP?
We were one of the original Pioneers, in the Pioneer for three years, during 2012, 2013, and 2014. And then in the fourth year, they changed the methodology for determining the benchmark, and our benchmark dropped 10 percent. Of the 30-plus pioneers, most people did a little better or stayed where they were. We were the only group that plunged. We had saved 5.5 percent, and there was no way we could save 10 percent to get to zero, so we had to drop out. In 2017, we went back into the Shared Savings Program, where their benchmarking is a little better; we’re in track 3. We don’t actually know yet. And the interesting thing I’ve always talked about is that in our organization, because we had been a Medicare Advantage organization since 1994, and we’d always had commercial risk, the doctors here weren’t worried about whether they could manage the care of the patients; they were actually quite happy to be a Pioneer or MSSP, because they wanted the same services available to their Medicare Advantage patients, to other patients. They were just worried about the benchmarks; they didn’t want to lose their shirts. It wasn’t a matter of principle; there had already been a culture shift.