As Dartmouth Health moves to affiliate with Claremont hospital, questions about competition reemege

Aug. 31—Less than four months after the state Department of Justice raised concerns about the effect of hospital mergers on health care costs, Dartmouth Health is seeking to bring another Upper Valley hospital under its umbrella.

This time, Dartmouth is looking to "affiliate" with Valley Regional Hospital in nearby Claremont. The hospitals said in statements that they thought the deal would help improve care in the Upper Valley.

"We believe that collaboration among providers is the most effective way to deliver that care," Dartmouth spokeswoman Audra Burns said in an email. "To that end, Valley Regional and Dartmouth Health have signed a letter of intent to begin the process of strengthening our relationship by having Valley Regional Hospital become part of the Dartmouth Health system."

A "listening session" is planned for next week. Leaders from both hospitals will hear concerns and answer questions from community members on Sept. 8 at 5:30 p.m., in person at Claremont Savings Bank at 145 Broad St. in Claremont, with a video-conference option.

Dartmouth Health already owns two smaller hospitals in western New Hampshire. Cheshire Medical Center in Keene and New London Hospital are owned by Dartmouth Health, and the system has clinics in Manchester, Derry, Bedford, Nashua. Dartmouth also owns two Vermont hospitals: Mt. Ascutney Hospital in Windsor and Southwestern Vermont Regional Medical Center in Bennington.

The hospital system's ambition to grow ran into a roadblock this spring.

In May, following two and a half years of negotiations, regulators scuttled Dartmouth Health's efforts to combine with GraniteOne, the parent company that owns Catholic Medical Center in Manchester and two other hospitals. That "combination" deal would have created the state's largest hospital network, consisting of seven hospitals.

In a report, the Department of Justice announced that its review found the deal would adversely impact competition for health care.

A 2019 proposal to merge Exeter Hospital and Wentworth-Douglass Hospital with the Massachusetts General Hospital system was also blocked by the state, with the Charitable Trusts Unit finding that that deal would have hurt competition. Exeter Hospital is now seeking to combine with another Massachusetts hospital network, Beth Israel Lahey Health.

Though the move to make Valley Regional Hospital would not create a massive statewide system, it would further consolidate Dartmouth's control of health care providers in the Monadnock region and Upper Valley. It was not yet clear how Dartmouth and Valley Regional would assuage any concerns from state regulators about competitiveness in the area.

"We are at the very beginning of a robust process of due diligence and regulatory review," Burns said.

Rural troubles

Hospitals in rural areas of New Hampshire have been struggling for years with finances, and running into trouble hiring, prompting some to consider mergers.

Medicare, the federal health insurance system for retirees, and Medicaid, the jointly-run state-federal insurance program for the poor and disabled, tend to reimburse hospitals at lower rates than private insurance, like the health insurance many people get through their jobs.

Because of that gap, hospitals that serve more retirees and more people living in poverty have tended to struggle financially.

Before Lakes Region General Hospital and Franklin Hospital were bought out of bankruptcy by Concord Hospital last year, the "payer mix" of too few people with private insurance was cited as a problem, compounded by the hospital's costly expansion amid the 2008 recession.

Smaller numbers of patients per year also mean that physicians are performing fewer procedures than their urban counterparts, which can impact their licensing. For some, that can make rural hospitals less attractive — so rural providers sometimes struggle to recruit doctors.

The shortage of doctors has been a factor in the closure of labor-and-delivery units in New Hampshire. Since 2000, 10 of the state's labor and delivery units have closed — the latest closure being Frisbie Memorial Hospital's unit last month.

Across the state, health care staffing has been a challenge coming out of the pandemic.

Hospitals offer lucrative sign-on bonuses for health care staff and have raised hourly wages for food service workers and custodians. Competition between providers can be fierce.

Dartmouth leaders have already been eyeing Claremont for staff.

Last August, a bus route connecting Claremont and Lebanon opened, with Dartmouth leaders saying they hoped the bus would help entice Claremont-area residents to commute north. Billing and medical coding functions are handled centrally for the Dartmouth affiliates, while each hospital hires health care workers and other on-site staff separately.