FTC abandons challenge to Jefferson Health-Einstein merger, allowing deal to proceed

Dive Brief:

  • The Federal Trade Commission will no longer challenge the merger between Jefferson Health and Einstein Healthcare Network, Jefferson Health said Monday. The news comes after a series of setbacks for the agency in court.
  • The deal between the two Philadelphia providers is now expected to close within six months, Jefferson Health said in a statement.
  • The FTC did not immediately respond to a request for comment.

Dive Insight:

This was the first big hospital merger the FTC tried to block after a three-year lull. The previous challenge occurred in 2017 when the agency blocked Sanford Health from acquiring Mid Dakota Clinic in North Dakota.

Late last year a federal judge declined to issue an injunction to halt the merger between Jefferson Health and Einstein Healthcare Network.

Judge Gerald Pappert of the Eastern District of Pennsylvania was not convinced that the merger would lead to a price increase for the area’s insurers. He said there are “abundant healthcare options” in the Philadelphia region, and said the insurer market is far more consolidated than the provider sector.

The Third Circuit Court of Appeals later denied the FTC’s efforts to bar the deal from moving forward pending an appeal, according to FTC documents.

Jefferson Health said Monday that it will now move forward with the deal as there are “no further barriers.”

With Einstein under its umbrella, Jefferson will expand from 14 to 18 hospitals. It said the deal, first announced in March 2018, will reinvigorate health education and research opportunities.

The FTC alleged that the two compete directly against one another for services. It argued that together they would control at least 60% of inpatient services around the north Philadelphia area and 70% of the inpatient rehabilitation services.

Posted in Law