Jefferson, Lehigh Valley Health Network sign non-binding letter of intent to combine, creating a leading regional health care system, including a national research university and a not-for-profit expanded health plan

The combined organization would have the ability to increase access to high-quality and affordable care, clinical research and health plan offerings and address health inequities for urban and rural communities in Eastern Pennsylvania and Southern New Jersey

PHILADELPHIA and ALLENTOWN, Pa., Dec. 19, 2023 /PRNewswire/ -- Today, 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. 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 ACA insurance offerings in Eastern Pennsylvania and Southern New Jersey.

The combined system would operate 30 hospitals and more than 700 sites of care.

Both Jefferson and LVHN are mission-driven organizations with existing capabilities in the growing field of population health management and quality-focused care services, which have consistently demonstrated positive impacts in improving the health of their respective communities. Combined, their capabilities and footprints will accelerate access to leading-edge health care services and health insurance benefits designed to serve the distinct community needs of populations they serve. The complementary capabilities will be further strengthened by both organizations' academic programs and learning environment, especially of the esteemed Thomas Jefferson University. This will increase opportunities for learners to receive clinical training, patients to participate in clinical research within the network, and provide more choice for health plan beneficiaries. Upon closing, the combined system would operate 30 hospitals and more than 700 sites of care, supported by more than 62,000 employed faculty, clinicians and staff.

"The healthcare 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."

Combination benefits 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. The parties are committed to ensuring the patients and communities they serve continue to have access to exceptional care from their providers during completion of this process.

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 Heath, while continuing to report directly to 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.

About Jefferson
Nationally ranked, Jefferson, which is principally located in the greater Philadelphia region and southern New Jersey, is reimagining health care and higher education to create unparalleled value. Jefferson is more than 42,000 people strong, dedicated to providing the highest-quality, compassionate clinical care for patients; making our communities healthier and stronger; preparing tomorrow's professional leaders for 21st-century careers; and creating new knowledge through basic/programmatic, clinical and applied research. Thomas Jefferson University, home of Sidney Kimmel Medical College, Jefferson College of Nursing, and the Kanbar College of Design, Engineering and Commerce, dates back to 1824 and today comprises 10 colleges and three schools offering 200 undergraduate and graduate programs to more than 8,300 students. Jefferson Health, nationally ranked as one of the top health care systems in the country and the largest provider in the Philadelphia area, serves patients through millions of encounters each year at 17 hospitals and over 50 outpatient and urgent care locations throughout the region. Jefferson Health Plans is a not-for-profit managed health care organization providing a broad range of health coverage options in Pennsylvania and New Jersey for more than 35 years.

About Lehigh Valley Health Network
Lehigh Valley Health Network (LVHN) is a nationally ranked premier health system with 20,000 colleagues and a rich legacy of providing patient-focused high quality care. Based in Allentown, LVHN is a five-time Magnet designated hospital system, serving a dynamic and growing region with the third largest population in the state of Pennsylvania. The health network includes 13 hospital campuses (four in Allentown, two in Bethlehem, one in Easton, one in East Stroudsburg, one in Hazleton, two in Pottsville, one in Dickson City, one in Lehighton) and is home to The Lehigh Valley Reilly Children's Hospital. LVHN cares for more than a million community members through its robust network of 29 health centers; more than 300+ primary and specialty care physician practices; 20 ExpressCARE locations, including the area's only Children's ExpressCARE; pharmacy, imaging, home health, rehabilitation and lab services; and preferred provider services through Valley Preferred. The LVHN Health Institutes deliver cutting-edge specialty care including: trauma and burn care for adults and children; kidney and pancreas transplants; perinatal/neonatal, cardiac, cancer, orthopedics, neurology, complex neurosurgery capabilities including national certification as a Comprehensive Stroke Center; and one of the nation's leading providers of advanced robotic surgery. LVHN's academic programs include a regional medical school campus, nursing school, and extensive graduate medical education offerings in more than 35 specialties.