Einstein warns of cuts, ‘death spiral’ without Jefferson merger


https://www.beckershospitalreview.com/hospital-transactions-and-valuation/einstein-warns-of-cuts-death-spiral-without-jefferson-merger.html?utm_medium=email

How to emerge from a 'death spiral' in stocks - MarketWatch

In a court filing, Einstein Healthcare Network warned that a move by the Federal Trade Commission to block its merger with Jefferson Health could lead to a “death spiral” at its Philadelphia flagship safety-net hospital, according to the Philadelphia Business Journal.

In court documents opposing an FTC analysis of the merger, Einstein said that its financial condition has deteriorated since 2017, resulting in operating losses averaging about $30 million per year.

Einstein said it will incur even greater losses, largely because of the challenging payer mix and large underinsured or uninsured population of its flagship Philadelphia medical center. 

Without a merger, “Einstein [would have to] dramatically cut its services at Einstein Medical Center Philadelphia, leading to job losses and even further reductions in maintenance and needed investment, precipitating a ‘death spiral’ that would jeopardize access to health care for many of Philadelphia’s underserved residents,” Einstein wrote in the documents, according to the Philadelphia Business Journal. 

The FTC announced in February its intent to sue to block the proposed merger, arguing that combining the two systems would reduce competition in Philadelphia and Montgomery counties.

“Jefferson and Einstein have a history of competing against each other to improve quality and service,” the FTC said in February. “The proposed merger would eliminate the robust competition between Jefferson and Einstein for inclusion in health insurance companies’ hospital networks to the detriment of patients.”

Einstein and Jefferson Health countered that a combined system still would face competition from other hospitals and operate in a challenging market dominated by one healthcare insurer, according to the report. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.