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Prescription for growth

Adding Milton Hospital, Beth Israel enters new era

By Robert Weisman
Globe Staff / January 3, 2012
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Milton Hospital, a community hospital that operated independently for 108 years, is starting 2012 with a new name: Beth Israel Deaconess Hospital-Milton.

The 81-bed hospital, taken over by Beth Israel Deaconess Medical Center on Sunday, could represent the first in a string of acquisitions, clinical partnerships, and alliances with physician groups that the Boston teaching hospital will undertake this year. With the health care market changing rapidly and cost pressures increasing, Beth Israel Deaconess is seeking to compete by building a bigger and more integrated health care network.

“Milton is an example of exactly where we intend to go strategically,’’ said Dr. Kevin Tabb, who took over in October as president and chief executive of Beth Israel Deaconess, a teaching hospital of Harvard Medical School. “We recognize that there will always be a place for academic medical centers to do what can’t be done anywhere else. But we also recognize that there’s a lot of care that can and should be provided in the community.’’

Massachusetts health care providers and insurers have been scrambling for two years to forge alliances and gain scale in anticipation of new state and federal laws that are expected to favor larger medical networks, with the idea they can better manage patient care and costs. In that context, the Milton acquisition is another key step for Beth Israel Deaconess, which has in recent years been quietly assembling a network of hospitals and doctors.

Beth Israel Deaconess has its own physicians group and operates Beth Israel Deaconess Hospital-Needham. It receives referrals from Atrius Health of Newton, the largest independent doctors organization in the state, and has affiliations with Anna Jaques Hospital in Newburyport and Lawrence General Hospital. It has also held preliminary talks with other potential partners, including Lahey Clinic in Burlington.

But Beth Israel Deaconess trails Partners HealthCare System and Steward Health Care System in size and reach. Partners owns nine Eastern Massachusetts hospitals, including Massachusetts General and Brigham and Women’s, both teaching hospitals.

Steward owns 10 community hospitals.

“There’s no question they [Beth Israel Deaconess] have a long way to go,’’ said Stuart H. Altman, professor of national health policy at Brandeis University in Waltham. “The question is whether they have to go as far and get as big as the others.’’

Altman said Beth Israel Deaconess needs to compete as both an academic medical center and a community hospital network. To do that, he said, it needs to attract more doctors and maintain a strong physician group that can draw patients and negotiate with health plans.

Beth Israel Deaconess suffered a blow in November when Steward, a for-profit system, offered financial incentives to lure away 150 doctors in the Whittier Independent Practice Association, based in Newburyport. Whittier was affiliated with the Beth Israel Deaconess Physicians Organization.

By extending its hospital network, through acquisitions such as Milton Hospital, Beth Israel Deaconess can strengthen the 1,700-member Beth Israel Deaconess Physicians Organization by bringing in more doctors and more referrals.

When nonprofits such as Beth Israel Deaconess and Milton Hospital merge, no money changes hands, though the acquiring organization becomes responsible for future investments. The larger Beth Israel Deaconess has promised to help Milton recruit 14 primary care physicians, to more than double the current number.

Beth Israel Deaconess struck an informal affiliation with Milton Hospital in 2003 and enhanced it two years later. Since then, many Beth Israel Deaconess doctors have begun practicing at Milton Hospital, helping to broaden its capabilities in areas such as hand surgery and treating cardiac arrhythmia.

With the acquisition, Beth Israel Deaconess plans to expand efforts to improve quality, common electronic medical records, and joint clinical programs, in areas ranging from geriatrics and emergency medicine to prostate care and specialized orthopedics.

Milton Hospital has long been hemmed in by the larger teaching hospitals in Boston and community hospitals in Quincy, Dorchester, and on the South Shore.

Milton Hospital draws just over 40 percent of its patients from Milton and 35 to 40 percent from neighboring Randolph, president Joseph V. Morrissey estimated. “Over the years,’’ he said, “whatever we did, we didn’t seem to be able to grow the market share of Milton Hospital in our service area.’’ The hospital spent $40 million four years ago to double the size of its emergency room, enlarge its operating room, and add a new lab and endoscopy suite. “We realized that we needed to grow. We needed more primary care physicians that called Milton Hospital their primary hospital.’’

Dr. Stan Lewis, senior vice president for network integration at Beth Israel Deaconess and vice president of its physicians group, said the goal of the merger is to help Milton Hospital grow and provide better health care, while sending patients requiring more complex care to the main campus in Boston.

For instance, if Milton Hospital emergency room doctors see a patient experiencing a heart attack, they will be able to send that patient directly to Beth Israel Deaconess’s cardiac center, bypassing its emergency room.

“It has to work for both organizations,’’ Lewis said.

He added there are no plans to increase the number of beds at Milton Hospital, though that might be considered in the future if demand grows.

Milton Hospital’s chief medical officer, Dr. Ashley Yeats, has been working with Beth Israel Deaconess counterparts in recent months on safety and quality measures, an example of the cooperation that both sides said they plan to deepen.

“It has become increasingly seamless as we’ve developed that relationship,’’ said Dr. Brook Longmaid, president of the medical staff at Milton Hospital.

While Beth Israel Deaconess hopes to use programs it has developed with Milton in other partnerships, there will be no single model for future collaborations, said Tabb, the new Beth Israel Deaconess chief executive.

“It’s not a one-size-fits-all, go-on-an-acquisition-spree and buy everything,’’ he said. “[But] the concept of a focused network is quite intriguing. It’s something the market is very interested in, and something we’re taking a close look at also.

“We will not be resting on our laurels.’’

Robert Weisman can be reached at weisman@globe.com.

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