Jefferson Health and Lehigh Valley Health Network have received regulatory approval to combine, completing a merger to create one of the largest health care systems in the U.S.
Combined, the new health system is one of the 15 largest not-for-profit health systems in the U.S., with 32 hospitals, more than 700 locations and about 65,000 employed faculty across eastern Pennsylvania and southern New Jersey, a news release from the network states. Annual revenue is estimated to be $12 billion to $14 billion. The network officially announced they had merged Thursday afternoon during a news conference at Lehigh Valley Hospital-Cedar Crest.
LVHN will undergo some type of rebranding but final branding decisions have not yet occurred, Dr. Joseph Cacchione, CEO of Jefferson, said during an interview ahead of Thursday’s merger announcement.
“Over time there will be a branding convention that will include the Jefferson name and the Lehigh name. The Lehigh name will be preserved and will not go away. The Lehigh Valley name has a lot of brand equity, it’s a very important brand — one of the reasons for our whole plan,” Cacchione said.
As of noon Thursday, when the merger finalized, Dr. Brian Nester, president and CEO of LVHN, now is executive vice president and chief operating officer of Jefferson, leading “the legacy Lehigh Valley Health Network” under Cacchione. Jefferson’s Dr. Baligh R. Yehia also serves as an executive vice president under Cacchione and is chief transformation officer and president of “the legacy Jefferson Health” organization.
Cacchione said most decisions affecting the Lehigh Valley will continue to be made by leadership within the Lehigh Valley but decisions will also be made at the system level.
“Brian is going to have as much influence on Philadelphia as I’m going to have on what happens in the Lehigh Valley. The executive team that will come together, which is made up of executives from the legacy Lehigh Valley and Jefferson organizations, will be making decisions on what is best,” Cacchione said. “Day-to-day operations, things like that, will all happen at the local level.”
Nester, who also spoke to The Morning Call ahead of Thursday’s announcement, said all money that was raised philanthropically and designated for LVHN as well as all the money LVHN has saved will stay with the legacy LVHN. He added that there is just one organization now, so decisions will be made for the benefit of the whole organization and all the communities it serves.
“I think for the very near future nothing will change and that’s from the perspective of a citizen of the Lehigh Valley. If you have an LVHN doc, you’re going to go to the access point, the practice you’re used to, none of that will change,” Nester said.
But some changes are coming, especially in program offerings. Jefferson has a National Cancer Institute-designated cancer program and the Sidney Kimmel Cancer Center, which Cacchione said has synergies with LVHN’s Topper Cancer Institute. He added there are also synergies between the two network’s cardiovascular and neuroscience programs that will allow them to expand both and provide more services to more patients.
“Jefferson has the top heart transplantation program in the city of Philadelphia right now,” he said. “We see the ability to find patients earlier in the Lehigh Valley, get them plugged into our transplant program, the top transplant program in the city and expedite the people’s path to cardiac transplantation.”
LVHN will end its medical school program with the University of Southern Florida and transition to Thomas Jefferson University and its Sidney Kimmel Medical College.
“About 15% of our docs and providers have either trained at Jefferson or went to school there,” Nester said. ” My wife trained at Jefferson and worked there for a long time as an ER doc. So the familiarity of Jefferson and their brand is going to be really good for us.”
Nester added that several members of the LVHN board of trustees will serve on the Thomas Jefferson University board.
Some changes like the implementation of Jefferson Health Plans, Jefferson’s noncommercial insurance marketplace, which offers Medicaid, Medicare Advantage, Affordable Care Act Marketplace and CHIP plans, in the Lehigh Valley will take some time. Cacchione said that expanding that program into the Lehigh Valley would require meeting regulatory requirements, so could not provide a specific timeline.
The CEOs of both networks said the program would improve care for underserved populations and reduce the cost of care.
Other possible changes are still up in the air. Caccione said for now there are no plans to eliminate LVHN’s home health care program in favor of Bayada Home Health Care, which Jefferson has a business partnership with.
“We don’t anticipate that level of change at this point. Over time, over the next three to five years, we’re going to be looking at everything that we have and maybe we’ll be transitioning Bayada over to LVHN,” he said. “We’re not making any statements about what direction we’re going to go. The combined organization is a different organization, so we have to look at it that way.”
LVHN traces its start to 1899, when Allentown Hospital opened at 17th and Chew streets. The health network’s flagship location on Cedar Crest Boulevard in Salisbury Township opened in 1974 as a joint venture between Allentown and Sacred Heart hospitals. Sacred Heart later pulled out of the venture, and the medical center eventually became known as Lehigh Valley Hospital-Cedar Crest.
The ensuing decades saw massive growth for the health network, which acquired hospitals in the Poconos, Hazleton and in Schuylkill County, as well as Coordinated Health, which was integrated into Lehigh Valley Orthopedic Institute. In recent years, LVHN has opened hospitals in Northampton and Carbon counties. It broke ground Wednesday afternoon on a behavioral health hospital in Hanover Township, Northampton County.
In recent years, Jefferson has acquired multiple hospitals and networks, including Abington Health in Montgomery County, Kennedy Health System in New Jersey and Einstein Healthcare Network, along with others.
LVHN and Jefferson Health announce plans to merge. Here’s what it means for the Lehigh Valley
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