Kevin Callahan, president of Exeter Health Resources Inc., said he signed a letter of intent to advance discussions with Massachusetts’ second-largest health system with the goal of reaching a final agreement by the end of spring.
Exeter Health Resources include Exeter Hospital, Basic Doctors and Rockingham Visiting Nurses Association and Hospice.
“It’s a stunning opportunity,” Callahan said. “We think a combination of Beth Israel Lahey Health and Exeter is a combination for the future and how we think about future demands. I couldn’t think of a better partner to pursue that future with.”
The announcement comes just over a year after Exeter Hospital’s potential merger with Massachusetts General Hospital (MGH) and its parent company Mass General Brigham officially fallen though after New Hampshire the Attorney General announced his opposition to the merger in 2019 due to antitrust concerns. Mass General Brigham is one of the largest health care systems in Massachusetts.
The merger under Mass General Brigham would have brought the not-for-profit Exeter Hospital under the same management as Wentworth-Douglass Hospital near Dover, which was acquired by MGH in 2017.
Callahan said that after MGH pulled out, 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 essential to ensure the long-term sustainability of the hospital, which is celebrating its 125th anniversary.
The COVID-19 pandemic, he said, has underscored this need with the number of patients who have sought emergency care for the coronavirus as well as mental health care.
The partnership would allow them to diversify and expand clinical services to meet community needs, as well as control health care costs by leveraging the purchasing power of the larger health care system, according to Callahan.
Why Beth Israel Lahey Health?
Callahan said Exeter Health Resources has spent the last year reviewing possible affiliations with health systems in New Hampshire and the New England region.
“What came out of this very thorough analysis was that Beth Israel Lahey would be an amazing potential partner for our organization,” he said. “They share similar values, similar aspirations as a health care delivery system. They are very grounded in the community to which they provide health care.”
Callahan said Beth Israel is committed to ensuring patients in Exeter 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 services that Beth Israel will provide are “much more than we could do on our own.”
“And those services will be built here,” Whitney said. “Here in Exeter and that’s going to be very important… They’re going to help us build on what we’ve been able to do in the community over the past 125 years.”
He said that was evident in the proposal Beth Israel Lahey made to the hospital board.
Details, Callahan said, at this stage are confidential but will be made public as the process progresses.
“The community will be struck by the level of investment and the importance that Beth Israel considers this organization to be part of its healthcare system,” he said.
Kevin Tabb, president and CEO of Beth Israel Lahey Health, said the Exeter hospital has been part of the fabric of southern New Hampshire for 125 years.
“The majority of care that Beth Israel Lahey Health provides across New England is delivered in community settings, and we believe Exeter’s shared commitment to high-quality care close to home makes it a complement exceptional to our system,” Tabb said.
What does potential membership mean for patients and the community?
Whitney said any potential affiliation will have no impact on the patient care currently provided.
“It won’t disrupt patient care in any way and, in fact, if we get through the regulatory process (which is necessary for the deal to go through), it will improve it,” he said.
Whitney said it would not impact the 2,400 staff currently working for Exeter Health Resources.
“Beth Israel has a track record that you can check out,” he said. “It’s not about shrinking. It’s about building.”
Callahan said that in his view Exeter has always been a “profit-making provider of health services for this community”.
He said that would not change. The new partnership will allow them, he said, to be even more profitable with “exceptional care”.
“One of the things that appealed to our board is that they went over those conversations with the State of Massachusetts in detail to make sure their growth was positive, not just for patients but for the economy,” 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 Beth Israel Lahey Health umbrella.
As part of the agreement with the Massachusetts Attorney General, the entity agreed to a seven-year price cap, which means that price increases will remain below the benchmark annual health care cost growth of the state by 3.1%. They also agreed to make $71.6 million in investments supporting health services for low-income and underserved communities.
Callahan said it’s unclear what a potential partnership with Beth Israel will mean for its existing contracts with MGH’s Center for Cancer Care, pediatric care and telestroke care.
“What we know, despite this uncertainty, is that there will be no uncertainty about the continuity of care for our patients,” he said. “We have many, many months 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 come down to Boston,” Whitney said.
“The commitment that Beth Israel Lahey is making and its ability to support it with resources and expertise is extremely exciting for us. We’re not looking to disrupt care, we’re talking about creating 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 thorough organizational and financial analysis.
“We review them and they review us,” Callahan said.
Once a final agreement is reached between Exeter and Beth Israel, it will need approval from the Federal Trade Commission and the states of New Hampshire and Massachusetts.
Callahan said Beth Israel Lahey Health has “extensive experience” securing complex regulatory approvals, noting their 2019 merger between Beth Israel Deaconess and Lahey Health.
Whitney is optimistic that they won’t face the same regulatory hurdles as with MGH.
“There are things that are really different about it,” he said. “The first is that we’re going to join, we’ll be the only hospital in New Hampshire that’s tied to Beth Israel,” Whitney said.
One of the reasons New Hampshire’s attorney general opposed the MGH merger was that Exeter Hospital and Wentworth-Douglass were both on the coastline and offered many of the same threatening services. “even higher health care costs for New Hampshire consumers.”
“Another big difference is that we’re now going to deliver another sustainable healthcare system in New Hampshire,” he said.
“This is going to benefit not only our organization, but also our patients in the communities we serve and the state as a whole. It’s going to give the state more choice in health care.”