Beth Isreal-Lahey merger raises a Medicaid issue
July 16, 2018
The hospitals included in the proposed merger of Beth Israel Deaconess Medical Center and Lahey Health have much in common, including a stated commitment to high-quality care and their desire to grow. Something else they share: a relatively low portion of their patients are poor or low-income.
At the acute-care hospitals that are part of the merger plan, an average of 13.1 percent of patients last year were on Medicaid, the government insurance program for poor and low-income individuals. That was far below the state average of 21.1 percent.
It was also less than the share of low-income patients at several other Massachusetts hospital systems, where the Medicaid population often accounts for at least 25 percent of total patients.
The figures, compiled for the Globe by the Center for Health Information and Analysis, a state health care data agency, represent patients who were admitted to and discharged from hospitals in the 2017 fiscal year. They do not include outpatient visits.
The numbers reflect an aspect of the big hospital merger that is causing consternation as it moves through the regulatory process: If Beth Israel Deaconess and Lahey consolidate, they will form a new health system stretching from New Hampshire to Cape Cod that focuses more on middle-class and wealthy patients than on the poor. That would leave a disproportionate responsibility to treat Medicaid patients to other hospitals.
The worry is that the pending merger could reinforce what some call a two-tier health care system in Massachusetts, where the largest hospital companies concentrate on wealthier patients while the smaller and less powerful ones care for the poor.
“If this transaction goes forward without adequate conditions, it might only worsen the situation,” said Dr. Paul Hattis, a professor at the Tufts University School of Medicine and a former member of the state Health Policy Commission.
The largest hospital system in Massachusetts, Partners HealthCare, also has a relatively low share of Medicaid patients. Partners hospitals discharged more than 23,000 Medicaid patients last year, a greater number than at any other hospital system — but that accounted for just 14.7 percent of Partners’ patients.
Caring for Medicaid patients can challenge hospitals financially, because the Medicaid program, known in Massachusetts as MassHealth, reimburses less for services than what private insurers pay. Hospital officials often complain that Medicaid payments are so low they don’t even cover the full cost of providing care.
Last week, Attorney General Maura Healey joined the growing list of people who are raising concerns about the Beth Israel Deaconess-Lahey merger, at least partly because of the potential ramifications for Medicaid patients. Healey signaled she may push for changes or limits to the merger.
The Health Policy Commission, a watchdog state commission, is scrutinizing the merger plan and expects to release a report Wednesday that details how the transaction would affect health care costs, quality, and access.
The merger received approval from the state Public Health Council earlier this year but it still needs Healey’s blessing to move forward. It is also under federal review.
Beth Israel Deaconess Medical Center and Lahey Health announced their plan in early 2017. Since then, New England Baptist Hospital, Mount Auburn Hospital, and Anna Jaques Hospital have joined the deal.
None of those hospitals are part of the merger.