State regulators have cleared the way for Valley Regional Hospital in Claremont to become part of the Dartmouth Health system.
Dartmouth Health — already New Hampshire’s largest health system — and Valley Regional announced plans to affiliate in 2022.
The New Hampshire Attorney General’s Office said Monday it will allow the deal to go forward, but with a number of conditions meant to ensure patients don’t face higher costs or lose access to services.
Hospital officials say they expect to finalize the deal later this summer.
New Hampshire, like the rest of the country, has seen a wave of hospital consolidation over the past decade. Experts say hospital mergers tend to lead to higher prices, and sometimes result in services being cut.
In 2022, the New Hampshire Attorney General’s Office blocked a proposed merger between Dartmouth Health and GraniteOne — a health system comprising Catholic Medical Center in Manchester and two smaller hospitals — over concerns it would reduce competition.
The Attorney General’s office said in court filings that the Valley Regional deal, as originally proposed, could have reduced competition and negatively affected patients, by giving Dartmouth Health a near-monopoly in the Sullivan County area.
The health system already owns most of the surrounding hospitals, including those in Keene, New London, Lebanon and Windsor, Vt. State regulators say Valley Regional and Dartmouth Health provide more than 80% of the inpatient hospital services received by Sullivan County residents.
But state regulators worked with the parties and negotiated a set of terms “that will alleviate the potential harm to health care consumers in New Hampshire,” the New Hampshire Attorney General’s office said in a news release Monday.
Those conditions will require Dartmouth Health to help pay for a new medical office building at Valley Regional Hospital, open a new addiction treatment center there and make other investments. The health system also pledged to maintain or expand certain key services at the hospital, including mental health, primary care, and pre- and post-natal care.
The health system will also be prohibited from using certain anti-competitive contracting practices with insurers. It also agreed to pay $2 million into a state fund designated for programs that aim to make sure the health care market is working for patients.
“These and other commitments will protect competition and ensure patients can access essential health care closer to home,” Attorney General John Formella said in a news release.
In a statement, Valley Regional Hospital and Dartmouth Health said they were pleased to reach an agreement with the Attorney General’s office.
“The two organizations share a strong commitment and a history of collaboration in providing the best care to the people of our state and the region, and believe that regulatory clearance by the Attorney General is a testament to the fact that this arrangement promises to improve healthcare delivery for the greater Claremont community and residents in Sullivan County,” the statement said.
They said the boards of both Valley Regional and Dartmouth Health will now conduct a period of due diligence, with a tentative closing expected in early July.
