COVID-19 has derailed Thomas Jefferson University's plans to acquire Fox Chase Cancer Center from Temple University, the Philadelphia-based institutions announced Tuesday.
"This transaction is the latest casualty of COVID-19," Dr. Stephen Klasko, president of Thomas Jefferson University and CEO of Jefferson Health, said in prepared remarks. "Because of the tremendous impact that the virus has had on our operations, Jefferson must focus entirely on providing patient care and safety, student education and safety, and for the well-being of our dedicated employees."
The combination of Fox Chase and Jefferson's Sidney Kimmel Cancer Center would've created new avenues for cancer treatment and research, executives from both health systems said. Jefferson also planned to buy Temple's interest in Health Partners Plans.
The pandemic has delayed or blocked a number of hospital deals in the works as providers weather the financial impact. The American Hospital Association estimates that COVID-19 could cost hospitals more than $200 billion from March through June, the biggest hit stemming from deferred surgeries. In the first quarter of 2020, hospital merger and acquisition activity was down compared to Q1 2019, with not-for-profit buyers pulling back by about 30%, according to Ponder & Co. data.
Jefferson Health also proposed a deal to merge with Albert Einstein Healthcare Network, although the Federal Trade Commission challenged the transaction on the grounds that it would reduce competition. Jefferson officials declined to comment on the deal's status.
Jefferson Health reported a $10.9 million operating loss through the first half of fiscal 2020 ended Dec. 31, 2019, up from an operating loss of $8 million from the same period prior, according to Modern Healthcare's financial database.