Pennsylvania health system merger could hike costs 20%, economist says

The estimated $599 million merger of Jefferson Health and Einstein Health Network would push hospital costs higher, an economist commissioned by the Federal Trade Commission testified Sept. 15, according to Law360

The FTC announced in February that it would sue to block the merger of the two Philadelphia-based health systems, arguing it would reduce competition in Philadelphia and Montgomery Counties. 

The FTC's injunction hearing began Sept. 14 and is expected to last the entire week. Loren Smith, PhD, a principal with The Brattle Group's global antitrust and competition group, testified during the second day of the hearing that the merger would likely have anti-competitive effects in both Philadelphia County and Montgomery County, according to the report. 

Dr. Smith, an economist who testified as an expert for the FTC, said the merger of Jefferson Health and Einstein Health Network could boost some acute care hospital costs by 9 percent and inpatient rehabilitation costs by as much as 20 percent, according to Law360

The two health systems argue that Einstein Health Network will remain on shaky financial footing without the merger and that the combination is needed to save Einstein's flagship hospital. 

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