Tuesday, December 19, 2023

Jefferson University and Lehigh Valley Health Network Announce Intent to Merge

Jefferson University and Lehigh Valley Health Network have announced they are in negotiations for a merger.

On Tuesday, Jefferson and Lehigh Valley Health Network (LVHN) announced they have signed a non-binding letter of intent to create a leading integrated care delivery system, including a national research university, and an expanded not-for-profit health plan. 

According to a press release, following the negotiation and execution of a definitive agreement, regulatory approvals and completion of closing conditions, the combined system will be better positioned to improve the health and well-being of rural and urban communities through its health care delivery network, learning environment and Medicare, Medicaid and federal health care exchange insurance offerings in Eastern Pennsylvania and Southern New Jersey.


Upon closing, the combined system would operate 30 hospitals and more than 700 outpatient sites of care, supported by more than 62,000 employed faculty, clinicians and staff.


“The health care landscape and our communities’ needs are changing; it is critical leading systems evolve and make investments in the future of care and wellness—growing and protecting access to enhanced, affordable, high-quality and innovative care, particularly for historically under-served patients,” said Joseph G. Cacchione, MD, Chief Executive Officer, Jefferson. 

“Combining Jefferson’s and LVHN’s resources will allow us to meet the changing needs of our diverse communities faster, more efficiently and more effectively. Together—with our combined network of resources and sites of care, managed care expertise, education and research capabilities—we will have the ability to make significant improvements to health outcomes and address health disparities in this region, and beyond, to the benefit our communities, patients, physicians, faculty, staff, students and health plan members.”


“We are thrilled to be combining with Jefferson and excited about the immediate and long-term benefits this combination will create for the communities of the Lehigh Valley and eastern Pennsylvania,” said Brian A. Nester, DO, MBA, MS, FACOEP, President and Chief Executive Officer, Lehigh Valley Health Network. “In Jefferson, we have found an ideal partner that shares our culture and commitment to excellence in clinical care and a learning environment, and that has done a fabulous job in establishing a highly successful health plan with a sharp focus on the well-being of Medicaid and Medicare beneficiaries. The expertise derived from these operations is becoming a crucial competency for health systems to deliver on their mission, and Jefferson Health Plans will help drive improvements in health outcomes, especially in vulnerable populations. We are also very excited about the opportunity to expand academic and talent development programs that will further bolster our provider pipeline and enhance our ability to attract and retain top talent to the benefit of the communities we both serve.”


The press release stated that the benefits of the combination would include:

  • A quality-focused care delivery model with the ability to expertly manage population health and reduce cost of care.
  • A wide-ranging care footprint, with 700+ sites of care across eastern Pennsylvania and southern New Jersey, including hospital, ambulatory and post-acute services, as well as a robust primary care base for preventive care.
  • Distinctive clinical services lines that meet patient needs and address health disparities, including strengths in primary care—particularly for patients who have historically faced barriers to high-quality specialty care such as oncology, neurology, orthopedics, cardiovascular and solid organ transplant.
  • Expansion of academic programs, and clinical research bolstered by clinical service lines.
  • A leading health plan that would strengthen patient choice within the LVHN service area, specifically focused on vulnerable and at-risk populations covered by Medicare and Medicaid.
  • Academic pathways for health professionals to acquire additional degrees and pathways for new graduates into high-demand positions.
  • Sustainable cash flow and improved financial stability, enabling the combined organization to continue investing in innovative treatment capabilities and R&D.

 The parties expect to sign a definitive agreement and close the transaction in 2024, pending completion of all necessary regulatory reviews and closing conditions. Both Jefferson and LVHN will continue to operate as separate, independent entities until the combination closes. 


Upon the closing of the transaction, Jefferson’s Cacchione will continue to serve as Chief Executive Officer of the Jefferson Enterprise. LVHN’s Nester will serve as Executive Vice President/Chief Operating Officer and President of the legacy Lehigh Valley Health Network, reporting directly to Dr. Cacchione. Dr. Baligh R. Yehia will serve as Executive Vice President/Chief Transformation Officer and President of the legacy Jefferson Health, while continuing to report directly to Dr. Cacchione. The newly integrated Board of Trustees and leadership team will be comprised of members from both systems. 

The specifics will be worked out in the definitive agreement.