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Beth Israel-Lahey merger would increase health costs by $138M, report says

The Massachusetts Health Policy Commission released its preliminary report on the proposed merger of Boston-based Beth Israel Deaconess Medical Center, Burlington, Mass.-based Lahey Health and three other healthcare organizations July 18, stating the merger would raise healthcare costs by tens of millions of dollars per year, WBUR reports.

Here are five things to know:

1. The preliminary report conservatively estimated the proposed deal would increase annual statewide spending on inpatient, outpatient and adult primary care services by $138 million to $191 million. The transaction would also increase spending on specialty physician services by $30 million to $60 million annually, the report states.

2. The report also found the merged organization, Beth Israel Lahey Health, would maintain a market share nearly equal to the state's largest hospital system, Boston-based Partners HealthCare, and grant the combined entity the power to demand higher prices from insurers, while treating the lowest proportion of Medicaid patients and nonwhite patients of any large hospital network in the state.

3. While leaders of Beth Israel Deaconess and Lahey Health previously said the merger would force market leaders to drop prices, the HPC found only one case — in Peoria, Ill. — in which smaller hospitals merging into a second-largest system were able to negotiate lower prices for patients.

4. Beth Israel Deaconess CEO Kevin Tabb, MD, who is poised to lead the combined system, said he will work with the HPC and Massachusetts Attorney General Maura Healey to get the deal approved. Ms. Healey recently sent a letter to the HPC expressing concern over the proposed deal.

"We look forward to sitting down with everybody that has an interest in this transaction to make sure that their interests and more importantly the interests of patients in this state are addressed," Dr. Tabb said, according to the report.

5. The organizations have 30 days to respond to the HPC in writing, after which the HPC will revise its analysis and issue a final report to Ms. Healey.

To access the full report, click here.

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