Business & Tech

Steward Health Care voices opposition to Beth Israel-Lahey merger

John Polanowicz, chief operating officer of Steward Health Care System.
Josh Reynolds/Associated Press/File 2014
John Polanowicz, chief operating officer of Steward Health Care System.

Steward Health Care System is joining the opposition against the big merger of two of its rivals, Beth Israel Deaconess Medical Center and Lahey Health.

A top Steward executive said Wednesday that the proposed merger would give Beth Israel Deaconess and Lahey too much clout in the local health care market, threatening community hospitals like those owned by Steward.

The merger, which received one approval in April and is pending others, would create a large new health system of 13 hospitals and thousands of doctors stretching across Eastern Massachusetts.


“We think mergers like this without an appropriate level of scrutiny put not only ours but many community hospitals at risk,” John Polanowicz, the chief operating officer of Steward, said in an interview.

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This is the first time Steward has publicly criticized the proposed merger since Beth Israel Deaconess and Lahey announced their plans more than a year ago. Steward, a private-equity backed hospital company, owns nine hospitals in Massachusetts, including St. Elizabeth’s Medical Center in Brighton and Carney Hospital in Dorchester. Steward grew substantially last year by acquiring dozens of hospitals in other states.

Polanowicz this week signed a letter that raised concerns about the Beth Israel Deaconess-Lahey merger and urged the state Health Policy Commission to thoroughly vet the deal. The letter also was signed by Normand Deschene, chief executive of the Wellforce health system; FayeRuth Fisher, the Massachusetts political director of the large labor union known as 1199SEIU; and Hanoi Reyes, spokeswoman for the Make Healthcare Affordable Coalition, which represents community members and is backed by the consulting firm Northwind Strategies.

The Health Policy Commission, a watchdog agency that studies how mergers and acquisitions affect health care costs, is expected to release its analysis of the deal in mid-July. A spokesman said Wednesday that the commission had received the letter.

Executives at Beth Israel Deaconess and Lahey have said they will create a high-quality health system that draws patients from more expensive health care providers, including the region’s biggest hospital network, Partners HealthCare.


But in the letter sent to the Health Policy Commission on Tuesday, critics argue that the merger would widen disparities between richer and poorer communities, noting that the hospitals included in the deal treat a smaller share of low-income patients than hospitals in the Steward and Wellforce systems treat.

“We believe this merger will result in higher costs for all and reduced access to care for many communities,” the letter states.

The transaction would include hospitals in the Beth Israel Deaconess system and the Lahey system, as well as New England Baptist Hospital in Boston, Mount Auburn Hospital in Cambridge, and Anna Jaques Hospital in Newburyport.

Wellforce CEO Deschene said the merger is simply “too much too fast.”

“What we really want to do is sound an alert,” Deschene said. “We just want to make sure we ask for the attention that this deal deserves. . . . We need to understand the ramifications of it all.”


Wellforce is the parent company of Tufts Medical Center, Lowell General Hospital, and MelroseWakefield Healthcare (formerly Hallmark Health).

The chief executive of Tufts Medical Center also criticized the proposed merger at a public hearing in April.

David Passafaro, a spokesman for the merging hospitals — which plan to call their new company Beth Israel Lahey Health — said they have a track record of providing “high quality, lower cost care to a wide range of patients in diverse communities.”

Passafaro, a senior vice president at New England Baptist Hospital, said the hospitals have submitted extensive details about their merger plans to state and federal agencies.

“The regulatory review process has been robust and thorough — in fact, even more robust and thorough than the process Wellforce and Steward went through to grow their systems,” he said in a statement.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey Follow her on Twitter @priyanka_dayal.