FTC rejects proposed merger of two major hospital systems in Pennsylvania

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The Federal Trade Commission (FTC) is challenging the proposed merger of the two major hospital systems in Pennsylvania.

On Thursday, the FTC approved the issuance of an administrative complaint to stop the proposed merger of Jefferson Health and Albert Einstein Healthcare Network.

Jefferson and Einstein are the leading providers of inpatient general acute care hospital services and inpatient acute rehabilitation services in Philadelphia County and Montgomery County, Pennsylvania.

In the complaint, the federal consumer protection watchdog argued Jefferson and Einstein have been competing against each other to provide quality health care to patients. Both hospital systems have been improving their medical facilities and investing in new technologies.

The proposed merger will eliminate the strong competition between the hospital systems, which is harmful to patients in Montgomery and Philadelphia Counties, according to the Commission.

“Today, Jefferson and Einstein compete for inclusion in commercial insurers’ hospital networks. A commercial insurer would find it difficult to market a health plan to employers and their employees living or working in the Philadelphia Area or the Montgomery Area that excluded all of the GAC hospitals owned by Einstein and Jefferson. Likewise, a commercial insurer would find it difficult to market a health plan to employers and their employees living or working in the Philadelphia Area that excluded all of the IRFs owned by Respondents,” said the FTC in the complaint.

FTC and Pennsylvania AG will jointly file a lawsuit

The FTC is seeking a temporary restraining order and a preliminary injunction to prevent Jefferson and Einstein from completing the proposed merger. It will also join the Pennsylvania Attorney General’s Office in filing a lawsuit with the federal district court to block the transaction.

In a statement, FTC Bureau of Competition Director Ian Conner, said, “Patients in the Philadelphia region have benefitted enormously from the competition between the Jefferson and Einstein systems. This merger would eliminate the competitive pressure that has driven quality improvements and lowered rates. Throughout our investigation, we have benefited from close cooperation with our partners in the Office of the Attorney General of Pennsylvania.”

On the other hand, Einstein said they will review the FTC’s complaint. The hospital network also expressed confidence that its merger with Jefferson “will result in continued high-quality care for our consumers.”