Jefferson Health, Lehigh Valley Health Network set to merge
The combined systems would create a 30-hospital network with a reported $14 billion in revenue.
Photo: Matt Mawson/Getty Images
Jefferson Health and Lehigh Valley Health Network have signed a non-binding letter of intent to combine, creating an integrated care delivery system that includes a national research university, as well as an expanded nonprofit health plan.
The merger would create a 30-hospital network with a reported $14 billion in revenue.
Following a definitive agreement and the usual regulatory approvals, the two entities said the combined system would be better positioned to serve eastern Pennsylvania and southern New Jersey with its Medicare, Medicaid and ACA insurance offerings.
Touting their care services and population health management, Jefferson and LVHN said their combined capabilities will accelerate access to healthcare services and health insurance benefits, with complementary capabilities further strengthened by both organizations' academic programs and learning environment.
They expect this will increase opportunities for learners to receive clinical training and patients to participate in clinical research within the network, and provide more choice for health plan beneficiaries.
Upon closing, the combined system would operate 30 hospitals and more than 700 sites of care, supported by more than 62,000 employed faculty, clinicians and staff.
WHAT'S THE IMPACT
Jefferson and LVHN highlighted a number of projected benefits to the combination, including a care delivery model capable of managing population health and reducing the cost of care, as well as a wide-ranging care footprint, with more than 700 sites of care across eastern Pennsylvania and southern New Jersey.
They also pointed to clinical service lines that have the potential to address health disparities, particularly for patients who have historically faced barriers to specialty care such as oncology, neurology, orthopedics, cardiovascular and solid organ transplant.
Other benefits, the organizations claim, include a health plan that would strengthen patient choice within the LVHN service area, specifically focused on vulnerable and at-risk populations covered by Medicare and Medicaid; academic pathways for health professionals to acquire additional degrees and pathways for new graduates into high-demand positions; and sustainable cash flow and improved financial stability, enabling the combined organization to continue investing in innovative treatment capabilities and R&D.
The parties expect to sign a definitive agreement and close the transaction in 2024. Both Jefferson and LVHN would continue to operate as separate, independent entities until the combination closes.
THE LARGER TREND
While partnership, merger and acquisition activity is returning to pre-pandemic levels, regulatory scrutiny of these transactions is also increasing. Proposed merger guidelines were issued by the Federal Trade Commission and the Department of Justice in July, and a finalized plan was released on Monday.
While the guidelines determine a merger's effect on competition in industries ranging from food and agriculture to healthcare, they are expected to impact the latter as health system M&A continues to climb back to pre-pandemic levels.
Since 1968, the DOJ and FTC have issued and revised merger guidelines several times, including in 1982, 1984, 1992, 1997, 2010 and 2020.
In January 2022, the agencies announced a broad initiative to evaluate potential updates and revisions to the Horizontal Merger Guidelines, issued in 2010, and the Vertical Merger Guidelines, issued in 2020.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
