The Federal Trade Commission said Thursday it will challenge the proposed merger between two Philadelphia-area not-for-profit health systems on the grounds the combination would reduce competition.
The FTC said it issued an administrative complaint against Jefferson Health and Albert Einstein Healthcare Network, which agreed to merge in September 2018. The deal would create a system with 18 hospitals, more than 50 outpatient and urgent-care centers, and leading rehabilitation and post-acute facilities. It would boast about $5.9 billion in revenue.
Competition between the health systems has driven them to upgrade medical facilities and invest in new technologies, but the merger would eliminate those benefits to the detriment of patients, the FTC said.
"Patients in the Philadelphia region have benefited enormously from the competition between the Jefferson and Einstein systems," said Ian Conner, director of the FTC's Bureau of Competition. "This merger would eliminate the competitive pressure that has driven quality improvements and lowered rates."
The agency said it authorized staff to seek a temporary restraining order and preliminary injunction to stop the merger and maintain the status quo pending an administrative trial scheduled to begin Sept. 1. The FTC said it will jointly file a complaint in federal district court with the Pennsylvania attorney general.
In a joint statement, Jefferson and Einstein said they would review the challenge to understand the FTC's position and how to move forward.
"We believe we have presented a strong and comprehensive case as to how the merger would benefit the patients we serve and advance our academic mission without reducing competition for healthcare services," they said. "At a time when regional and national politicians and leaders are seeking ways to better support essential safety net hospitals, we see this merger as a creative solution to preserve access and enhance services to the residents of North Philadelphia."
The two hospitals systems, which have had an academic affiliation for two decades, have said their merger would benefit underserved patients in the area and expand their ability to provide value-based care and medical training for students.
The FTC said the health systems, if allowed to merge, would control at least 60% of the market for inpatient general acute care hospital services in and around North Philadelphia, and at least 45% of that market in and around Montgomery County. Combined, the health systems would also control at least 70% of the inpatient acute rehabilitation facilities in Philadelphia.