EagleTribune.com, North Andover, MA

July 20, 2011

Beverly Hospital, Lahey Clinic team up

Two organizations will align, form new health system

By Ethan Forman
Staff writer

BEVERLY — Northeast Health System's board voted unanimously yesterday to affiliate with the Lahey Clinic to form a new health care system in northeastern Massachusetts.

Northeast, which is Beverly Hospital's parent organization, will align with Lahey and form a new organization called Lahey Health System, to be led by Lahey's president and CEO, Dr. Howard Grant.

Both health systems will continue to operate on their own under the umbrella of the new parent organization. Kenneth Hanover, president and CEO of Northeast, will continue to run the Northeast system.

Northeast Health System operates Beverly Hospital, Addison Gilbert Hospital in Gloucester and several other health care facilities, as well as several human services agencies. Lahey Clinic, a research and teaching hospital, is headquartered in Burlington and has a second hospital in Peabody.

No financial details have been announced about the arrangement, because no money will change hands, the leaders of the two health care systems said.

Grant said in a statement that the two entities will make "a great health care team."

The goal is to provide an increased quality of care to patients at a lower cost, they said.

"We need to get bigger so we can provide more comprehensive services," Hanover said. "Size gives us greater opportunities to achieve cost efficiencies."

Yesterday's announcement came after months of speculation about the fate of Northeast, which has been seeking to merge or affiliate with another system. Other possible suitors included the nonprofit Beth Israel Deaconess Medical Center and two for-profit companies, Steward Health Care and Vanguard.

"My take on it is this looks like a positive resolution," said Beverly Mayor Bill Scanlon, who said Beverly Hospital is the city's largest employer. "I think this is the least unsettling choice they could have made."

For a patient at Beverly Hospital, the arrangement will provide access to Lahey's expertise in highly complex cases. It will also allow the two organizations to better manage patient care and costs.

Lahey specializes in adult medicine and complex cases, while Beverly Hospital offers obstetrics, pediatric care, post-acute care and behavioral care that Lahey lacks. Both health care organizations already have long-standing relationships in clinical care and cardiology, Hanover said.

Lahey Clinic is a physician-led, nonprofit group practice and the teaching hospital of Tufts University School of Medicine. Its North Shore center in Peabody has 10 inpatient beds, a 24-hour emergency service and ambulatory surgery center. It recently built a new addition.

Lahey Clinic in Burlington has 317 beds, and the affiliation with Beverly may allow it to handle more patients.

"Lahey Hospital is full most of the time," Grant said, as its facilities have an 83.5 percent occupancy rate.

Beverly Hospital is an acute-care hospital with 227 inpatient beds and a 24-hour emergency service. Northeast not only includes Beverly and Addison Gilbert, but the BayRidge psychiatric hospital in Lynn, the Beverly Hospital at Danvers outpatient medical center in Danvers, Northeast Medical Practice, Northeast Behavioral Health and Northeast Senior Health.

In all, the Northeast system has 355 licensed beds, 5,000 employees and 600 physicians, according to Laura Wareck, a spokeswoman for Northeast.

The affiliation comes at a time when the North Shore has seen an expansion of medical facilities, and increased competition from Partners Health Care.

, the parent organization of North Shore Medical Center in Salem and the new Mass General/North Shore Medical Center for Outpatient Care in Danvers.

Boston Children's North also recently expanded its presence in Peabody.

The health care systems' affiliation must pass muster with regulators, and the health care organizations are planning to hold community forums to explain the new structure.

The new parent organization will have a 12-member board that will consist of equal numbers of representatives from both Northeast Health System and Lahey's board. Additional board members will be selected from the community.

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