The recently announced merger between the Harvard-affiliated Mount Auburn, Beth Israel and Deaconess Hospitals will create a new competition between two conglomerates of five Harvard-affiliated hospitals.
Beth Israel and Deaconess Hospitals announced plans to merge three weeks ago; and on Monday, Mount Auburn Hospital announced it would join them.
The new network, yet to be named, will compete for patients with Partners HealthCare System Inc., the conglomerate formed in 1993 from Mass. General and Brigham and Women's Hospitals.
"I think any of the entities that are able to grow in size will be in a better position to compete," says Bryan Costantino, health care consultant at the Boston accounting firm of Coopers and Lybrand.
Partners HealthCare, with $1.8 billion in total revenue, is nearly twice as large as the new network, but Beth Israel and Deaconess have announced they will add more community hospitals to their network.
The proposed merger between Mount Auburn, Beth Israel and Deaconess would combine their resources into a single corporation with more than $1 billion in revenue, 9,000 employees and 1,800 physicians.
Background
Dean of the Medical School Daniel C. Tosteson '46 tried in the summer of 1993 to develop a closer collaboration between the Medical School and its five major teaching hospitals, Mass. General, Brigham and Women's, Beth Israel, Deaconess and Children's Hospitals, which had been fiercely independent and competitive.
But those plans erupted in December of 1993, when Mass. General and Brigham and Women's announced their merger, bypassing Tosteson and the Medical School.
The merger was organized behind closed doors by then-Business School Dean John H. McArthur, the chair of Brigham and Women's Hospital.
In the fall of 1994, Children's Hospital discussed a possible merger with Partners HealthCare, but those talks fell through.
Other merger discussions involving Beth Israel and Deaconess Hospitals have fallen through recently.
Beth Israel conducted unsuccessful merger talks with the Lahey Clinic last year, while a deal between Deaconess and New England Medical Center, a Tufts teaching hospital, also fell through.
But some say rising costs in the health care industry make mergers necessary for survival.
"I think this is the direction the market [is] heading in terms of hospitals getting larger in order to compete," Costantino says.
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