Amidst mega-merger proceedings, Lahey Health CEO announces September retirement

Credit: Lahey Health

As scrutiny of a mega-merger between Beth Israel Deaconess Medical Center and Lahey Health continues, Lahey's CEO Howard Grant, MD, will step down from his post and retire at the end of September, the system announced.

Richard Nesto, MD, has been appointed as interim CEO of Lahey Health by its Board of Trustees, effective October 1, following the retirement of Howard Grant. 

Originally, Grant joined Lahey in 2010 as president and CEO of Lahey Hospital & Medical Center, and subsequently led the hospital through its affiliation with Northeast Health System two years later in 2012 and then in 2014 with its affiliation with Winchester Hospital in 2014. Thus Lahey Health was created. 

Grant has led the combined system since 2012, and first announced general plans to retire in January 2017, when the letter of intent for the affiliation of Lahey Health and Beth Israel Deaconess Medical Center was signed. The proposed merger now also includes New England Baptist Hospital, Mount Auburn Hospital and Anna Jaques Hospital. Grant stayed on as CEO to support planning for the new system and the regulatory process.

"As CEO of Lahey Health, Dr. Grant has created an integrated health care system that provides the full continuum of services locally, keeping high quality care in the community. Dr. Grant has played a vital role in the planned affiliation to form Beth Israel Lahey Health, an integrated health system which will deliver superb care at a reasonable cost to patients, employers and the Commonwealth," the system said.

"The eight years that I have spent at Lahey Health have been deeply rewarding both personally and professionally. I have been humbled to work with dedicated clinical and support staff across the Lahey Health system to provide high-quality, high value care to all the patients and communities that we proudly serve," said Grant. "Dr. Nesto has been an integral part of realizing Lahey Health's vision, and the Board and I are confident that he is the right person to lead the organization."

In April, the proposed merger of Lahey Health and Beth Israel, along with New England Baptist, Mount Auburn Hospital and stand-alone Anna Jaques Hospital in Newburyport, Massachusetts was unanimously approved by the Public Health Council with certain conditions, according to a letter sent to Lahey Health's General Counsel David Spackman.

However, in July Massachusetts Attorney General Maura Healey raised concerns about the deal in a letter to the PHC, saying that independent facilities could lose crucial commercially-insured patients to the new system, a system whose providers already see fewer MassHealth patients than other hospitals.

It was the first time the AG had raised concerns about the proposed merger. AG Healey noted that independent hospitals in the region that are not included in the deal are reimbursed at lower rates from commercial insurance carriers and large portions of their payer mixes include public insurance through Medicare or MassHealth. Losing commercially insured patients could have a negative financial impact.

"Because the BI-Lahey providers are higher priced than these other hospitals, such a shift in patient population would increase aggregate health care expenditures. And because public payers traditionally pay less than commercial insurance, such a shift would disproportionately reduce revenue to affected hospitals, potentially undermining the financial stability of some of them," she wrote.

She also voiced concerns about price hikes following the completion of the merger, a trend seen in other transactions. A preliminary report citing concerns about price hikes among other issues was released by the PHC. A final report is due out in a couple weeks following feedback from Lahey and BIDMC and further discussions.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com