Jefferson Health & Lehigh Valley Health Network Finalise $14 Bn Merger

The merger was finalized on August 1, 2024, marking a significant consolidation in the healthcare sector.

The merger integrates Jefferson Health and LVHN into a system now ranked among the top 15 not-for-profit health systems in the country. 

Jefferson Health, based in Philadelphia, and Lehigh Valley Health Network (LVHN) of Allentown, Pennsylvania, have completed their $14 billion merger, forming one of the largest not-for-profit health systems in the United States. 

The merger was finalized on August 1, 2024, marking a significant consolidation in the healthcare sector.

The merger, first announced in December 2023 and formalized in May 2024, integrates Jefferson Health and LVHN into a system now ranked among the top 15 not-for-profit health systems in the country. 

The combined entity will operate under the Jefferson Health name and manage 32 hospitals and over 700 care sites throughout Eastern Pennsylvania and Southern New Jersey. 

The new system employs around 62,000 people and is expected to generate approximately $14 billion in annual revenue.

Jefferson Health's CEO, Dr Joseph G Cacchione, will continue to lead the merged organization. 

"As we create our third century, this is a historic moment for our 65,000 colleagues. It marks a new chapter in access, innovation, equity, and opportunity for patients, students, and health plan members," Cacchione, added.

Reportedly, Baligh Yehia, MD, will be president of the legacy Jefferson Health and executive VP/chief transformation officer of the newly formed entity. Further, members of both organizations will join the leadership team and board of trustees.

What Led to the Merger?

The merger aims to enhance patient access to care, expand clinical research, and broaden health plan offerings in the US.

It is anticipated that LVHN’s current region will soon gain access to Jefferson Health Plans. 

Dr Brian Nester, previously CEO of LVHN and now executive vice president/chief operating officer of the combined system, commented, "Our combination will enhance access and elevate service by bringing more specialists, locations, expertise, research, and education to the patients and communities we serve."

Jefferson Health, part of Thomas Jefferson University, had reported significant financial challenges, including a $231 million operating loss for the 2023 fiscal year. 

Despite these issues, the merger is a strategic move to bolster the system’s resilience against market disruptions and improve overall financial stability.

LVHN, on the other hand, operates 13 hospital campuses and a network of 29 health centers, along with over 300 physician practices. For fiscal 2023, it reported an operating income of $10.4 million. 

Dr Cacchione highlighted the merger’s potential benefits, stating, “Through our integrated operating model, the combined organization will provide the communities we serve with access to the highest quality care, the benefits of continuous research and innovation, a network of specialists, clinical trials, and so much more, while also building an organization that prioritizes health through value-based care."

The merger also addresses the evolving healthcare landscape by responding to increased demand for integrated care services and improving patient outcomes. 

As the two systems merge, they will focus on maintaining continuity of care and enhancing their capabilities to meet the needs of their diverse patient populations.

The New Structure

Following the merger, Jefferson Health will become Pennsylvania’s second-largest non-profit system, trailing only behind UPMC. The newly formed organization will be governed by a board comprised of members from both Jefferson Health and LVHN, with leadership roles designed to leverage the strengths and expertise of both entities.

Dr Nester expressed confidence in the merger's potential impact, stating, “Jefferson is the ideal partner for Lehigh Valley Health Network, our teams, and our patients. We look forward to continuing the important work of improving the health and well-being of our communities together.”