FTC Drops Opposition to Einstein Healthcare-Jefferson Health Merger

The two Philadelphia health systems declare victory, say their merger has cleared its "final hurdle."

The Federal Trade Commission has dropped its opposition to the proposed merger of Philadelphia rivals Jefferson Health and Einstein Healthcare Network, clearing a final hurdle for the deal that could be finalized within six months. 

"The Commission vote to voluntarily dismiss its appeal to the Third Circuit of the district court decision declining to preliminarily enjoin the merger of Thomas Jefferson University and Albert Einstein Healthcare Network was 4-0," the FTC said in a case summary.  

A spokesperson for the FTC said the commission would have no further comments.

The merger, first announced in March 2018, will expand Jefferson from 14 to 18 hospitals and create a health system that generates about $6 billion in revenues annually.

Jefferson Health CEO Stephen K. Klasko called the FTC's decision to drop its opposition "a milestone victory for the city of Philadelphia and for those patients and families we proudly serve."  

"Two non-profit, anchor institutions coming together to preserve access to care and do the right thing by the residents of Philadelphia is a creative solution to ensure Einstein doesn't face the same fate as Hahnemann University Hospital," said Klasko, MD, MBA, who is also president of Thomas Jefferson University.

When the FTC initially blocked the proposed merger on a 4-0-1 vote, it noted that Jefferson and Einstein were "the two leading providers of inpatient general acute care hospital services and acute rehabilitation services in both Philadelphia County and Montgomery County, Pennsylvania."

"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," the commission wrote.

In December, a federal judge called the FTC's case against the merger "not credible," and based on biased testimony from health insurers. The FTC had appealed the ruling with the U.S. Third Circuit Court of Appeals, but filed a notice to voluntarily dismiss the complaint with the appeals court on January 6.

Pennsylvania Attorney General Josh Shapiro dropped his opposition to the merger in January after he secured a commitment from Jefferson to invest $200 million for capital improvements at Einstein facilities.

"We are excited to have Einstein and Jefferson come together, as our shared vision will enable us to improve the lives of patients, the health of our communities and enhance our health education and research capabilities," said Einstein CEO Ken Levitan.

"By bringing our resources together, we can offer those we care for - particularly the historically underserved populations in Philadelphia and Montgomery County – even greater access to high-quality care," Levitan said.