, Gloucester, MA

March 22, 2012

Hospital merger gets final approval

By Steven Fletcher
Staff Writer

The state's Public Health Council on Wednesday signed off on the planned affiliation or merger between Lahey Clinic and Northeast Health System, provided the new nonprofit corporation — Lahey Health Systems — keeps Northeast's Addison Gilbert Hospital services at current levels for a minimum of three years and conducts a community health needs assessment for going forward.

The Public Health Council's approval was the last that Lahey and Northeast needed before the non-profits join in their partnership.

Northeast Chief Executive Officer Ken Hanover said Attorney General Martha Coakley's office signed off on the affiliation with no stipulations. The Federal Trade Commission, he added, chose not to review the proposal, leaving it up to state approvals.

With approvals in place, the two nonprofits are expected to complete the affiliation on May 1.

The affiliation gives the two health care corporations the green light to go forward, and will create a $1.5 billion, integrated regional health system along an axis from Gloucester to Burlington. The new corporation is to be governed by a new Lahey Health Systems board with equal representation from Northeast and Lahey.

While the merger has received support from most of that axis, Cape Ann residents and officials have pushed for a guarantee that Addison Gilbert will continue to operate as a community hospital with essential services, including an emergency room.

Northeast and Lahey, according to the Department of Public Health's recommendation approved by the health council in Boston on Wednesday, revised their initial three-year guarantee for the hospital, and made it a binding condition of the merger.

The Public Health Council made the three-year minimum guarantee and the community health needs assessment binding conditions of the affiliation.

"Staff finds that the revised commitment binding the Lahey Health System to maintain Addison Gilbert for three years and to undertake a comprehensive community health needs assessment represents a reasonable response to the comments of interested parties related to the future of Addison Gilbert," the Department of Public Health recommendation states.

The Department of Health recommendation indicated the condition is appropriate "given the rapidly changing marketplace, the current marginal financial viability of Addison Gilbert and the precedent of commitments made in recent transfers of ownership in the commonwealth."

Lahey President Dr. Howard Grant said the affiliation will allow the newly formed nonprofit to invest in its community hospitals.

Grant said Lahey Health Systems would work toward bringing additional services to Addison Gilbert based on the community needs assessment. Lahey Health, he added, has no plans to close or reduce services at Addison Gilbert.

"There have been no discussions on either part of Lahey or Northeast Health Systems related to reducing services in Addison Gilbert Hospital," Grant said. "We would be thrilled if over time we would be able to add services in the community."

Expanding services at Addison Gilbert, Grant said, will take full engagement from residents and physicians in the Cape Ann area.

If Lahey Health systems is going to invest in the community, Grant said it will have to do it in collaboration with medical groups like the Cape Ann Medical Center.

Steven Fletcher may be contacted at 1-978-283-7000 x3455, or Follow him on Twitter at @stevengdt.