Philadelphia health system merger clears latest FTC challenge

Ayla Ellison (Twitter) - Print  | 

An appellate court on Dec. 21 denied the Federal Trade Commission's latest attempt to block a merger between Philadelphia-based Jefferson Health and Einstein Healthcare Network. 

The FTC and the Pennsylvania attorney general's office sued in February to block the deal. They argued the combination of the two systems, which comprise 17 hospitals, would reduce competition in Philadelphia and Montgomery counties and lead to price increases. 

Judge Gerald Pappert of the U.S. District Court for the Eastern District of Pennsylvania rejected that argument and held Dec. 8 that the government did not meet its burden. The FTC's case relied on testimony from health insurers, which the court said was "not credible" and "undercut by other evidence," the judge wrote in the 62-page decision. 

The FTC on Dec. 9 filed a motion for an emergency injunction pending appeal, arguing the health systems will not be injured by temporarily delaying the transaction during the appeals process because the merger agreement does not expire until the later of Dec. 31, 2021, or 60 days after a final decision by a U.S. Court of Appeals. 

On Dec. 21, a panel of three judges from the Third Circuit Court of Appeals denied the FTC's request to stay the merger.

In a joint statement, the health systems said they're evaluating next steps. 

"We are heartened to learn that the United States Court of Appeals for the Third Circuit has denied the Federal Trade Commission and the Pennsylvania Attorney General's request for a stay of the merger between Jefferson and Einstein. The merger of our two nonprofit, safety-net health systems will broaden our delivery of accessible and value-based care to patients and preserve our decades-long shared academic mission," the health systems said. 

"The communities we serve throughout the Philadelphia region, especially North Philadelphia, are well served by today’s decision. We are confident that, by working together, we can improve the lives of our patients and the health of our communities. We hope to move forward with the merger of our academic medical centers and finalize it in 2021."

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