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February 2, 2017

Around the nation: Beth Israel Deaconess plans to merge with Lahey Health

Daily Briefing
  • Massachusetts: Beth Israel Deaconess Medical Center and Lahey Health on Monday signed a letter of intent to merge. The combined health system would be the second-largest in the state—after Partners HealthCare—with eight hospitals overall and $4.5 billion in annual revenue. Under terms of the deal, Kevin Tabb, current CEO of Beth Israel, would become CEO of the combined system, while Lahey Board of Trustees Chair Ann-Ellen Hornidge would serve as chair of the combined system. The deal is subject to regulatory approval (McCluskey, Boston Globe, 1/30; Castellucci, Modern Healthcare, 1/31).

  • New York: A Long Island-based cardiologist has been sentenced to five years in prison and five years of post-release supervision for plotting to have a rival physician killed after a professional dispute. Police began investigating Anthony Moschetto after the Drug Enforcement Administration received a tip that a large number of oxycodone prescriptions were coming from his office. In April 2016, Moschetto was arrested after offering an undercover police officer $5,000 to have a physician assaulted and $20,000 to have him killed. Moschetto also gave the undercover officer $500 and a blank prescription as a retainer. In October 2016, Moschetto pleaded guilty to criminal possession of a weapon, conspiracy, and arson among 77 total counts. His medical license also will be suspended (NBC New York, 1/31; Rappleye, Becker's Hospital Review, 1/31).
  • Tennessee: After a 58 percent increase in profits in the fourth quarter of 2016, HCA Holdings plans to make significant investments in "large, fast-growing urban markets." HCA said revenue increased 3.8 percent year over year to $10.64 billion, in part because of higher patient volumes. Meanwhile, HCA President Sam Hazen in an earnings call Tuesday said a portion of the hospital operator's $2.9 billion capital budget for 2017 will be used to increase its number of urgent care centers from 72 to 120 by the end of the year, as well as to increase its freestanding EDs from 61 to 80 locations by 2018. "Our capital spending is a direct reflection of the opportunities we see," Hazen said (Barkholz, Modern Healthcare, 1/31; Ellison, Becker's Hospital CFO, 1/31; Kennedy, Nashville Business Journal, 1/31).

There's more than just M&A. Get the cheat sheet for hospital partnership and affiliation models.

The field guide to hospital partnership and affiliation models

Behind the flurry of M&A in recent years, a deeper trend of hospital integration is underway: the emergence of alternative partnerships that secure many of the same benefits of M&A without the financial and legal commitment: Clinical affiliation, regional collaborative, accountable care organization, and clinically integrated network.

This guide defines these types of partnerships and offers benefits, drawbacks, and examples of organizations in each.


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