FTC to no longer challenge Jefferson Health-Einstein Network deal

A merger between Einstein Healthcare Network and Jefferson Health can move forward after it was determined the Federal Trade Commission will not stand in the way, the systems said.

The FTC will not appeal a federal judge’s ruling from December to block the agency’s lawsuit seeking to halt the merger of the Philadelphia-based hospitals.

“It’s a milestone victory for the city of Philadelphia and for those patients and families we proudly serve,” said Stephen Klasko, president of Thomas Jefferson University and CEO of Jefferson Health, in a statement Monday.

Jefferson Health plans to acquire Einstein’s three acute care hospitals and an inpatient rehab hospital. Klasko said he expects the merger, which will expand Jefferson from 14 to 18 hospitals, to close within six months. 

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The FTC sued to halt the merger over fears it would raise prices for patients in the Philadelphia area.

The agency said that the merger would increase Jefferson Health’s market share in the city and require insurers to charge higher rates for premiums. But a federal judge said in a ruling in December that the agency’s lawsuit didn’t prove that there would be a credible harm to competition.

The FTC’s decision comes as the agency has taken a more aggressive approach towards scrutinizing hospital mergers, with mixed results so far.

An FTC lawsuit did prompt Memphis-based Methodist Le Bonheur to call off a bid to buy two Tenet-owned hospitals.

The agency also launched a probe in fall 2019 that looked at the impact of hospital consolidation on prices and quality.

Experts believe that the COVID-19 pandemic could also accelerate the growing trend of healthcare consolidation among not just hospitals but also private practices, as the pandemic has caused major financial losses among some facilities that could spur greater merger activity.