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Interfaith Leaders Are Against The Hospital Merger That Would Create A Second Mass. Health Care Giant

Beth Israel Deaconess Medical Center in Boston. (Steven Senne/AP)
Beth Israel Deaconess Medical Center in Boston. (Steven Senne/AP)

When will we say no to medical mega-mergers?

Earlier this year, the Massachusetts Health Policy Commission (HPC) determined that the proposed merger between Partners HealthCare and Massachusetts Eye and Ear is likely to increase Massachusetts commercial health care spending by $20 million to a total of $60 million a year.

Yet the Public Health Council voted to allow the merger — with some conditions. Those conditions are incomplete in scope, planned to be in place for only five years and likely insufficient to mitigate all of the increase.

Now up for review is what would be the second largest merger in Massachusetts health care to date: a proposed merger between the Beth Israel Deaconess Medical Center system, Lahey Health and a few other hospitals. The new company would be called Beth Israel Lahey Health (BILH).

The stated plan by BILH is that they will, through this merger, become a large enough entity to successfully compete against Partners, thereby reducing patients’ costs as they gain market share at Partners’ expense.

This past April, the state's Public Health Council voted to approve this merger. They did so without placing a single condition that prevents or mitigates cost increases to consumers. The current regulations also required this vote to take place even though the HPC cost and market impact review was not yet completed.

The HPC preliminary review was released on July 18, and found that this merger will likely increase health care spending in Massachusetts by approximately $250 million a year. The report also states that “[t]hese figures are likely to be conservative.”

Additionally, the report notes that “to date, the parties have not committed to constraining future price increases, despite the fact that their own financial projections indicate that they would be profitable without significant price increases.”

The report further finds that, even if Beth Israel Lahey Health was successful in shifting care from other providers, “there is no reasonable scenario in which such savings would offset spending increases if BILH obtains the projected price increases.”

So much for the stated goal of producing savings by taking business away from the very high-priced Partners.

What does seem more certain from the HPC’s economic analysis is that with greater negotiating leverage, prices at the newly merged system will rise. Even if they succeed in gaining some market share from Partners, they will likely also take it from other lower priced providers. In total, the HPC found only about $13 million in total savings – compared to the nearly $250 million in additional commercial spending that we consumers will be asked to pay for our health care.

At this point, even with all of these harms predicted in the HPC analysis, the merger can only be stopped or amended at the discretion of Dr. Monica Bharel, commissioner of Massachusetts Department of Public Health, or by the attorney general’s office.

One of the biggest drivers of rising out-of-pocket medical expenses for Massachusetts citizens is the increased prices charged by our hospitals and affiliated medical practices. The larger, more powerful medical providers are able to negotiate higher prices with insurance companies. These increases are then passed on as higher insurance premiums, higher deductibles, higher co-pays and reduced coverage.

So these increases are paid for directly out of our — the consumers'-- pockets.

The ability to have more power in these negotiations is a powerful motivation behind the continued mergers occurring in the Massachusetts health care marketplace.

There has been some effort to slow down medical costs in Massachusetts. The Greater Boston Interfaith Organization was a strong proponent of the health care reform passed in 2006, as well as the passage in 2012 of Chapter 224, which established the health care cost growth benchmark, the HPC and the Center for Health Information and Analysis.

There have also been some limited successes, including the denial of the merger of Partners with South Shore Hospital and Hallmark Health in 2015. Attorney General Maura Healey used the HPC’s report showing that costs to consumers would rise by as much as $50 million annually to stop that settlement, which was agreed upon by her predecessor, Martha Coakley.

But the win was limited because Partners was able to go forward with a South Shore physician group acquisition, and continuously pursues physician and outpatient care growth strategies, bringing in more money each year.

So here we are again — first with Partners’ latest expansion, and now significant consolidation proposed by the new conglomeration, Beth Israel Lahey Health.

When will our legislators, the attorney general and regulators such as the Public Health Council push back and tell Partners and other entities that they must stop giving us only misleading statements about "savings" flowing from mergers? When will they instead pass laws and regulations and go to court to mandate that provider consolidation deliver real savings to consumers?

And if the merger fails to deliver, when will the attorney general go back into court to either take the excess profits away by levying fines or enforce antitrust laws to break up provider systems?

No one is against high-quality health care that can be delivered at a fair and reasonable price. But the facts show that these mega-mergers have a long history of dramatically increasing costs, leading to rising premiums and out-of-pocket payments, with no real access or quality benefits for consumers.

Our state government has an obligation to ensure that new mergers do not take place without sufficient protections in place. They must include guarantees that our costs will not go up, and that promised savings are not only produced, but are also passed on to consumers and taxpayers through lower premiums and out-of-pocket expenses.

Rev. Burns Stanfield is president of the Greater Boston Interfaith Organization and Bonny Gilbert is chair of its health care team.

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