Exeter Hospital eyes joining Beth Israel Lahey Health. Here's why and what to expect.
EXETER — Exeter Health Resources announced Tuesday it's exploring an "exciting" and "game-changing" affiliation to join Beth Israel Lahey Health in Massachusetts.
Kevin Callahan, president of Exeter Health Resources Inc., said it has signed a letter of intent to move forward with discussions with the second-largest health system in Massachusetts with the goal of reaching a definitive agreement by late spring.
Exeter Health Resources includes Exeter Hospital, Core Physicians and Rockingham Visiting Nurse Association & Hospice.
"This is a striking opportunity," Callahan said. "We think a Beth Israel Lahey Health and Exeter combination is a combination for the future and how we think about the future demands. I couldn't think of a better partner to pursue that future with."
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The announcement comes a little more than a year after Exeter Hospital's potential merger with Massachusetts General Hospital (MGH) and its parent company Mass General Brigham officially fell through after the New Hampshire attorney general announced opposition to the merger in 2019 because of antitrust concerns. Mass General Brigham is one of the largest health care system in Massachusetts.
The merger under Mass General Brigham would have brought the not-for-profit Exeter Hospital under the same leadership as Wentworth-Douglass Hospital in nearby Dover, which was acquired by MGH in 2017.
Callahan said after MGH withdrew, Exeter Hospital decided to go back to the drawing board after reaffirming why an "affiliation makes sense for Exeter."
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He said Exeter leaders still believe an affiliation is critical to ensure the long-term sustainability of the hospital, which is celebrating its 125th anniversary.
The COVID-19 pandemic, he said, underscored that need with the number of patients who sought emergency care for the coronavirus as well mental health care.
The partnership would allow them to diversify and grow clinical services to meet the needs of the community, as well as control health care costs by leveraging the purchasing power of a larger healthcare system, according to Callahan.
Why Beth Israel Lahey Health?
Callahan said Exeter Health Resources spent the last year looking at possible affiliations with health care systems across New Hampshire and throughout the New England region.
"What emerged out of that very deep analysis was that Beth Israel Lahey would be an extraordinary potential partner for our organization," he said. "They share similar values, similar aspirations as a healthcare delivery system. They are very much grounded in the community that they provide healthcare to."
Callahan said Beth Israel is committed to ensuring Exeter patients have access to world-class care, close to home.
Mark Whitney, vice president of strategic planning at Exeter Health Resources Inc., said the growth and community-based services that Beth Israel will provide are "much more than we could do on our own."
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"And these services will be built around here," Whitney said. "Right here in Exeter and that is going to be very important... They are going to help build on what we have been able to do in the community over the last 125 years."
He said that was evident in the proposal Beth Israel Lahey made to the hospital's board.
The details, Callahan said, at this stage are confidential but will be made public as the process moves along.
"The community will be struck by the level of investment and the importance that Beth Israel looks at this organization as being a part of their healthcare system," he said.
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Kevin Tabb, president and CEO of Beth Israel Lahey Health, said Exeter Hospital has been part of the fabric for southern New Hampshire for 125 years.
"The majority of care Beth Israel Lahey Health provides across New England is delivered in community-based settings, and we believe that Exeter’s shared commitment to high-quality care close to home makes them an exceptional fit with our system," Tabb said.
What does a potential affiliation mean to patients and the community?
Whitney said any potential affiliation will have no impact on the patient care currently provided.
"This will not disrupt their patient care in any way and in fact, if we are successful in getting through the regulatory process (which is required for the deal to go through), it will enhance it," he said.
Whitney said it would not impact the 2,400 employees currently working for Exeter Health Resources.
"Beth Israel has a track record that you can look at," he said. "This is not about shrinking. This is about building."
Callahan said in his view Exeter has always been a "cost-effective provider of healthcare service to this community."
He said that will not change. The new partnership will allow them, he said, to be even more cost-effective with "outstanding care."
"One of the things appealing to our board was they have gone through those conversations with the state of Massachusetts in great detail about making sure their growth was a positive, not just for patients but for the economics," Whitney said.
Whitney was referring to the 2019 merger between Beth Israel Deaconess and Lahey Health that created the 13 hospital system of more than 4,000 physicians across the Bay State under the umbrella of Beth Israel Lahey Health.
As part of the agreement with the Massachusetts' attorney general, the entity agreed to a seven-year price cap, which means price increases will remain below the state's annual healthcare cost growth benchmark of 3.1% They also agreed to make $71.6 million in investments supporting healthcare services for low-income and underserved communities.
Callahan said it's unclear what a potential partnership with Beth Israel will mean to its existing contracts with MGH’s Center for Cancer Care, pediatric care and telestroke care.
"What we do know, notwithstanding that uncertainty, is, there will be no uncertainty regarding the continuity for the care of our patients," he said. "We have many, many months lying ahead of us which would give us ample time to understand how this potential partnership could affect our relationship with MGH."
"We want to bring more services to this area instead of asking our patients and community members to go down to Boston," Whitney said.
"The commitment Beth Israel Lahey is making and their ability to back that up with resources, expertise is extremely exciting for us. We are not looking at disrupting care, we are talking about building that access," Whitney said.
The next steps
Callahan said the next step is to reach a final agreement with Beth Israel Lahey Health which includes a deep dive into the organization and financials.
"We examine them and they examine us," Callahan said.
Once a final deal is reached between Exeter and Beth Israel, it will need to gain approval by the Federal Trade Commission and by the states of New Hampshire and Massachusetts.
Callahan said Beth Israel Lahey Health has "deep experience" in securing complex regulatory approvals noting their 2019 merger between Beth Israel Deaconess and Lahey Health.
Whitney is optimistic they won't run into the same regulatory hurdles they did with MGH.
"There are things that are really different about this," he said. "One is that we are going to be joining, we will be the only hospital in New Hampshire that is related the Beth Israel," Whitney said.
One of the reasons why the New Hampshire attorney general opposed the MGH merger was because Exeter Hospital and Wentworth-Douglass were both on the Seacoast and offered many of the same services threatening "even higher health care costs to be borne by New Hampshire consumers."
"Another big difference is that we now are going to be bringing another sustainable health system to the table in New Hampshire," he said.
"It's going to benefit not only our organization but our patients in the communities we serve and the state as a whole. It's going to give the state more choices for healthcare."