Pennsylvania hospital systems complete mega-merger

Two Pennsylvania hospital systems have come together.

Jefferson Health has completed its acquisition of the Lehigh Valley Health Network, merging the two Pennsylvania systems. With the deal, Jefferson now operates 32 hospital campuses and is among the 15 largest nonprofit hospital systems in the U.S.

Jefferson Health has completed the acquisition of the Lehigh Valley Health Network, and this qualifies as a mega-merger. With the deal, Jefferson and Lehigh Valley have formed one of the 15 largest nonprofit health systems in the United States.

The merged system includes 32 hospital campuses and more than 700 other healthcare locations in the Philadelphia region, eastern Pennsylvania and southern New Jersey. Jefferson also operates a health plan as well.

Jefferson and Lehigh Valley first disclosed their plans to merge in December 2023, and they announced in May that they had reached a definitive agreement on a merger.

Jefferson officials said patients in the Lehigh Valley will eventually have expanded access to specialty care, alleviating the need for patients to travel to Philadelphia. Patients will continue to see their clinicians, Jefferson said. Jefferson also said leaders from both organizations will engage in “a thoughtful integration process that purposefully aligns and builds upon the strengths of both organizations.”

Joseph G. Cacchione, MD, CEO of Jefferson, now serves as the chief executive officer of a significantly larger organization.

Cacchione says the merger will expand healthcare opportunities across the region. He pointed to “all the good we will do for the communities we’re privileged to serve.”

“This milestone is even more significant as Jefferson celebrates its bicentennial, marking our longstanding commitment to improving lives through education, health care and discovery,” Cacchione said in a statement. “As we create our third century, this is a historic moment for our 65,000 colleagues as it marks a new chapter in access, innovation, equity, and opportunity for patients, students and health plan members. We have many more milestones ahead as we share knowledge and integrate our operations.”

Brian Nester, who had served as Lehigh Valley’s CEO, now holds the title of executive vice president and chief operating officer of the Jefferson enterprise, and he will lead the Lehigh Valley Health Network. Nester will report directly to Cacchione.

“Our combination will enhance access and elevate service by bringing more specialists, locations, expertise, research and education to the patients and communities we serve,” Nester said in a statement.

Jefferson said the board of directors and leadership of the merged system will include representatives from both organizations.

For now, Lehigh Valley will be referred to as “Lehigh Valley Health Network, proudly part of Jefferson Health” in marketing materials. Lehigh Valley will adopt the Jefferson brand over time, the system said.

Baligh R. Yehia, MD, will serve as president of Jefferson Health and executive vice president and chief transformation officer of the Jefferson enterprise. He pointed to the potential of closing disparities in care among underserved groups.

"The combination of our two world-class health care institutions will allow us to set the course for care in the region by launching new clinical programs, advancing health equity and building healthier communities,” Yehia said in a statement.

Jefferson pointed to greater availability of expanded, affordable health plans for those relying on Medicare and Medicaid.

The organization said the merged organization will offer more educational opportunities for future clinicians, while also providing clinicians and staff more chances to grow and advance in their careers.

Jefferson, based in Philadelphia, serves communities across the city’s suburbs and into southern New Jersey. Lehigh Valley Health Network is based in Allentown, about an hour north of Philadelphia, and serves patients across northeastern Pennsylvania.

While Jefferson has expanded in recent years, the health system has also seen some financial struggles, as reported by WHYY public media in Philadelphia. Jefferson reported a $78.5 million loss for the fiscal year ending June 30, 2023, which followed a $125.8 million loss in the 2022 fiscal year, according to financial statements.

The Pennsylvania healthcare market has seen a number of mergers and acquisitions recently. In April, Risant Health, a subsidiary of Kaiser Permanente, completed the acquisition of Geisinger Health.

The University of Pennsylvania Health System announced in January that it plans to acquire Doylestown Health, a provider in the Philadelphia suburbs. Doylestown would become a part of Penn Medicine when the deal is complete. Penn Medicine, based in Philadelphia, has been expanding beyond the city in recent years.

WellSpan Health completed the acquisition of Evangelical Community Hospital last month.