Anna Jaques joins Lahey, Beth Israel in hospital merger

Anna Jaques Hospital in Newburyport.

NEWBURYPORT — Anna Jaques Hospital, Lahey Health, the Beth Israel Deaconess system, New England Baptist Hospital and Mount Auburn Hospital have signed a definitive agreement to create a new regional health system in Eastern Massachusetts, the nonprofits announced Thursday.

Anna Jaques in Newburyport — which has 123 beds — is an independent hospital that is already clinically affiliated with Beth Israel Deaconess Medical Center. It has 1,200 employees and more than 200 physicians on staff.

On the North Shore, Lahey Health includes the 227-bed Beverly Hospital, the 58-bed Addison Gilbert Hospital in Gloucester, the 10-bed Lahey Medical Center in Peabody, and Lahey Outpatient Center in Danvers, among its various locations.

The new system will wrap its arms around 13 hospitals, including eight community hospitals. It will include more than 800 primary care physicians and more than 3,500 specialists.

“This transaction involves some of the biggest and most well-established health systems in the Commonwealth," said Dr. Stuart Altman, chairman of the Massachusetts Health Policy Commission, in a statement on the agency's website. "It represents the most significant change in the structure of the Massachusetts health care market in more than 20 years, and it will further consolidate our health care market into a small number of major systems and a declining number of independent community hospitals.

“The HPC will objectively review the proposed transaction for its potential impact, both positive and negative, on health care costs, quality, access, and market competitiveness in the state. We look forward to learning more as we conduct our review," Altman said.

The agreement brings the hospitals one step closer toward finalizing a merger. The process began in January, when Lahey Health and Beth Israel Deaconess officials signed a non-binding letter of intent to explore their affiliation.

“Our new system will offer patients extraordinary care in the most convenient location, supported by world class research and medical education,” said Dr. Kevin Tabb, CEO of Beth Israel and CEO of the new system, in a prepared statement. “In addition, the new system will strengthen our ability to make the investments in our facilities, technology and people that will help ensure our continued success. Together, we will improve patient care, help contain rising health care costs, and better position our member hospitals in a rapidly changing health care environment.”

The individual hospitals will retain their names and licenses.

Although there will be a new system board, each hospital will remain a nonprofit institution with its own board, leadership team and clinical staff. Members of the new system will maintain their existing research and medical education programs.

"We are confident that our new system will have a positive impact in terms of health outcomes, patient satisfaction and cost containment, benefiting our patients and their families, our communities, employers, and the Commonwealth of Massachusetts," said Ann-Ellen Hornidge, chairwoman of the trustees of Lahey Health and the trustees of the new system, according to the statement.

The proposed new system faces review from federal and state regulators. During the review process, the member hospitals of the new system will continue to operate independently.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.

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