Jefferson, Einstein Healthcare Network to explore merger

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Jefferson Health and Einstein Healthcare Network, both in Philadelphia, signed a nonbinding letter of intent to merge, Jefferson Health confirmed to Becker’s Hospital Review March 27.

Jefferson Health comprises 14 hospitals and 50-plus outpatient and urgent care locations, while Einstein Healthcare Network maintains three hospitals, approximately 1,000 licensed beds and 8,800-plus employees across its facilities.

With the move, Jefferson and Einstein Healthcare Network will set the stage for the creation of one of the region’s largest residency programs, officials said.

The organizations will enter a period of due diligence, and will sign a definitive agreement should they choose to move forward.

“Einstein Health Network is the perfect match for our vision of an academic and health system ‘with no address’ where the patients and students are the boss. Einstein has a history of caring for the underserved, training health professionals of the future and embracing change and innovation which makes them the perfect partner for our trustees’ goal of helping to create a healthcare innovation revolution in Philadelphia,” Jefferson Health President and CEO Stephen K. Klasko, MD, said in a statement to Becker’s Hospital ReviewMarch 27.

“Einstein represents an academic medical center with a 150-year history of caring for the underserved despite challenges in healthcare. [Einstein Healthcare Network President and CEO] Barry Freedman knows that urban hospitals still fill a unique role in their communities, despite many other hospitals packing up and heading for the suburbs. Einstein had many options for future partners and I’m glad they went with us,” he continued.


Atrium, UNC Health put merger plan on ice

Dive Brief:

  • Atrium Health, formerly known as Carolinas HealthCare System, announced Friday that its planned merger with UNC Health has been suspended because of disagreements between the two systems on which would control the combined company, The Charlotte Observer first reported. The now-stalled deal would have created a system with more than 50 hospitals and 100,000 employees.
  • The lapse in negotiations comes less than a month after Atrium signed a letter of intent to partner with Navicent Health.
  • Although consolidation among hospital systems has ramped up over the past year, the failure of the two groups to come to terms shows it’s not always a smooth path.

Dive Insight:

The merger plan was announced in September, but the deal now appears to be going nowhere.

“In our letter sent to UNC Health Care today, we informed them that while we have not been able to reach an agreement, our respect for UNC Health Care, its team and UNC Health Care’s accomplishments has grown through this process,” said an Atrium Health statement also obtained by Healthcare Dive.

Merger mania is still clearly evident in the industry, however.

Advocate Health Care and Aurora Health Care recently moved closer to merging to form the 10th largest nonprofit healthcare system in the U.S. after receiving regulatory approval from both the Federal Trade Commission and Illinois.

Meanwhile, Ascension and Presence Health recently signed a definitive agreement to combine, and Ascension is reportedly in talks to also buy Providence St. Joseph Health. Catholic Health Initiatives and Dignity Health are also working to merge into a new health system, which would have 139 hospitals operating in 28 states.

The mergers are evidence that health systems continue to search for ways to capture economies of scale and cut costs as hospitals face lower reimbursements and patient volumes. But despite the trend, combining massive health systems can be difficult with regulatory and other challenges.


North Carolina treasurer asks UNC Health Care for $1B bond to ensure cost savings from pending merger

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North Carolina Treasurer Dale Folwell is calling for Chapel Hill, N.C.-based UNC Health Care to issue a $1 billion performance bond to guarantee cost savings from the health system’s pending merger with Charlotte, N.C.-based Atrium Health, according to The News & Observer.

UNC Health Care and Atrium Health, previously named Carolinas HealthCare, signed a letter of intent to merge in August 2017, but the systems have released few details about the proposed deal.

“With a lack of details on this merger and little evidence that mergers like this have generated savings for the public, I feel I have a fiduciary responsibility to pursue this guarantee that will protect North Carolina taxpayers,” Mr. Folwell said in a statement to The News & Observer.

UNC said it will work with the state treasurer to develop ways to meet state employees’ healthcare needs at the lowest cost. However, cutting costs is not the system’s top priority. “Our No. 1 job is taking care of patients. We do not control inflation or other variables associated with the cost of care,” UNC said in a statement to The News & Observer.