NH AG clears way for Exeter Hospital to merge with Beth Israel Lahey Health

EXETER — The New Hampshire attorney general's office is signing off on the proposed merger between Exeter Health Resources and Beth Israel Lahey Health in Massachusetts, but with stipulations.

Attorney General John Formella announced Wednesday a negotiated deal has been reached. The next step is for a Merrimack County Superior Court judge to approve it.

Exeter Health Resources includes Exeter Hospital, Core Physicians and Rockingham Visiting Nurse Association & Hospice.

Beth Israel Lahey Health currently includes 13 hospitals, all in Massachusetts, including Beth Israel Deaconess Medical Center of Boston and Anna Jaques Hospital in Newburyport. Like Exeter, it is not-for-profit. It has 25 ambulatory facilities, 35,000 employees and operating revenue of $6.2 billion.

“EHR found a complementary partner in BILH who was willing to make enforceable commitments to Exeter and the state,” Formella said. “We are pleased with the cooperation and willingness of BILH (Beth Israel Lahey Health) to make significant commitments to the community. We look forward to seeing the numerous benefits promised by the parties delivered to New Hampshire consumers.”

Formella stated the Charitable Trusts Unit and Consumer Protection and Antitrust Bureau completed their review of the proposed merger.

The office is required by state law to review the deal to evaluate the likely competitive impact of the merger and what it will mean for consumers.

While the deal as initially presented would have caused an "unfair method of competition and risked substantially lessening competition," Formella said the negotiated deal aims to address those concerns.

What are the terms of the deal and how does it benefit NH?

The terms, according to the AG's office, will ensure adequate protections for consumers, and the benefits promised by the parties from the transaction are "ultimately delivered to the Exeter community."

“We are pleased to have worked with the state to advance our proposal to join Beth Israel Lahey Health,” said Kevin Callahan, president and CEO of Exeter Health Resources, in a prepared statement. “This marks a significant milestone in securing the sustainability of our healthcare system and its ability to continue to thrive and meet the evolving healthcare needs here in the Seacoast region."

Terms of the deal include that as part of Beth Israel Lahey Health's commitment to invest $375 million into Exeter Health Resources, it will fund and operate a minimum of 10 designated receiving facility beds (a hospital-based psychiatric unit or a non-hospital-based residential treatment program) on the Exeter campus for at least 10 years.

Exeter Hospital will also maintain labor and delivery services for at least 10 years.

Other terms state both entities agree they will not enter into anticompetitive contracting terms and practices with commercial health insurers and will protect physicians and mid-level providers from restrictive covenants and interference with patient referral and treatment decisions.

EHR and BILH will also develop a clinical services growth plan to bring additional services to the Exeter community.

In addition, BILH will pay the state $10 million over 10 years to be used for the benefit of New Hampshire healthcare consumers. The priority of the funds is for the establishment of a New Hampshire healthcare market research entity that would monitor, analyze, and publicly report on the New Hampshire healthcare market.

“As a result of continued provider and insurer consolidation, transparency in the New Hampshire market is critical for consumers and the government to evaluate and make informed health policy decisions,” said Formella.

According to the agreement, compliance will be monitored by an independent third party.

The terms in the proposed agreement, according to the AG's office, are based on experts’ in-depth analysis of the anticipated loss of competition between the parties and the potential for cross-market effects from the proposed affiliation.

“As we welcome a large out-of-state system into New Hampshire, we must be mindful of the potential risks the transaction poses to health care consumers," Formella stated. "New Hampshire consumers already pay high prices for health care in this State and it is essential that appropriate conditions are placed on the parties and there is sufficient transparency to the public on the transaction.”

What does a merger mean for Exeter?

Exeter Health Resources signed a definitive agreement to join Beth Israel Lahey Health in Massachusetts on June 28, 2022, which followed separate approval by the boards of each organization.

Callahan said at the time the affiliation will allow Exeter Health Resources to become "cost-efficient" and offer "more value where every single dollar is spent on health care."

As part of the deal, Beth Israel Lahey Health will maintain and grow access to clinical services in Exeter Health Resources, making an overall $375 million capital investment over 10 years.

Under the proposed terms of the merger, Beth Israel Lahey Health would become the sole corporate member of Exeter Health Resources, which includes Exeter Hospital, Core Physicians and Rockingham Visiting Nurse Association & Hospice.

Exeter Health Resources' structure will stay the same and the local board will continue to oversee ongoing operations, reviewing and recommending strategic plans and operating and capital budgets as well as philanthropy and community benefit funding.

When could the merger be finalized?

If the judge signs off on the negotiated agreement between the AG and EHR and BILH, both organizations anticipate finalizing the merger later this summer.

“Exeter has been an integral part of the New Hampshire community for more than 125 years, and together we can build on that legacy of service and excellence for many years to come,” said Kevin Tabb, MD, president and CEO of Beth Israel Lahey Health, in a prepared statement. “Exeter and Beth Israel Lahey Health share a commitment to deliver extraordinary care and improve the health of the communities we serve. We are pleased that the New Hampshire Attorney General’s Office has agreed to terms that will allow this affiliation to move forward and we look forward to Exeter officially joining Beth Israel Lahey Health soon.”

This article originally appeared on Portsmouth Herald: NH AG clears way for Exeter-Beth Israel Lahey Health merger