Tuesday's announcement that Lehigh Valley Health Network and Philadelphia-based Jefferson Health plan to merge could shake up health care across the region.
If the merger goes through, it would create the second largest medical network in the state after UPMC in Western Pennsylvania. It includes a national research university, an expanded nonprofit health plan, 30 hospitals, more than 700 outpatient clinics, and more than 62,000 employed faculty, clinicians, and staff throughout eastern Pennsylvania and southern New Jersey. is included. Annual revenue is estimated at $12 billion to $14 billion.
But what impact will the merger actually have? To find out, The Morning Call spoke to Chad Meyerhofer. Professor of Economics, Lehigh University He is also an expert in the healthcare business.
Meyerhöfer said the merger is likely to be completed without significant opposition from regulators because LVHN and Jefferson do not compete within the same geographic area of the health care market.
If all goes well, LVHN and Jefferson expect to receive regulatory approval in less than a year.
But that doesn't mean we'll see changes right away, Meyerhöfer said.
“These medical systems are huge. It's like piloting an aircraft carrier. If you want to change direction, you have to change slowly,” he said. “It will take some time for this merger to be approved, and then it will take even more time for these health systems to really start to integrate between the two departments.”
Where a merger could bring about the biggest change for the Lehigh Valley is in insurance.
Together, LVHN and Jefferson will integrate Jefferson Health Plans, Jefferson's nonprofit insurance marketplace offering Medicaid, Medicare Advantage, Affordable Care Act Marketplace, and CHIP plans, into LVHN's existing healthcare business. promoted the benefits of integrating into The CEOs of both networks said the program will improve care for underserved populations and reduce the cost of care.
Although there is no program comparable or comparable to Jefferson Health Plan in the Lehigh Valley, it is not the only program of its kind in Pennsylvania. This is an established program, having existed as a Health Partners plan for more than 30 years before Mr. Jefferson took sole ownership in November 2021. More than 340,000 people are covered by the Jefferson Health Plan, the majority of whom are covered by Medicaid.
Meyerhoefer said the hospital does not profit from Medicaid or Medicare. With most of this country's large baby boomer population transitioning or already transitioning to Medicare, and many with serious medical needs and chronic conditions, hospitals can actually save money on health care. I stand to lose.
But Meyerhoefer said hospitals can make up for those losses by increasing the efficiency of their services and treating large numbers of Medicaid and Medicare patients.
“By offering a high volume of services at a low payment rate, you increase your revenue if you can serve your patients very efficiently. It's also good for your patients because you have better access,” Meyerhöfer said. Stated.
He said that Medicaid patients, but especially those who are underinsured and underserved, can gain greater access to continuity of care and outpatient medical services by obtaining a plan from Jefferson Health Plans. He said there would be significant benefits in terms of better access. Especially for people who receive Medicaid, it can be difficult to find an outpatient health care provider that accepts your insurance. However, this problem does not exist if the company providing Medicaid insurance also owns the outpatient care provider.
“They can leverage their scale and advanced management capabilities to start offering these plans to Medicaid patients. They can also offer plans on the health insurance exchanges to enroll and We are able to provide comprehensive coverage to patients who are often excluded from treatment and have a more limited ability to pay for their care,” Meyerhöfer said.
“This reduces unpaid care and improves continuity of care. And, if you're large enough, you can leverage the volume of patients you see to maintain revenue.”
However, those with private plans may end up paying more. Meyerhöfer said consolidation could reduce competition and larger networks, putting more pressure on insurers to improve coverage and rates, ultimately leading to higher premiums for private insurance plans. He said that there is a sex.
This has been revealed by several studies. Kaiser Family Foundation The report found that some mergers, particularly those that combine health systems operating in different markets, resulted in price increases ranging from 6 percent to 17 percent.
Federal Trade Commission Objecting to hospital mergers based on price increaseswe find that they can reduce competition and lead to higher prices.
Unions representing nurses across the region, including those at LVH-Pocono, also expressed concern.
“Studies show that mergers can increase health care costs for patients by as much as 12 percent without a commensurate increase in the level of patient care,” Matt Yarnell, president of SEIU Healthcare Pennsylvania, said in an email. said. “Furthermore, the highly concentrated health care market can lead to lower wages and staffing for front-line workers. … We want patients and front-line workers to be part of this conversation. We want to remain central. The increasing trend of consolidation and acquisitions raises many questions and concerns, but we look forward to working with the Lehigh Valley and Jefferson University if this transaction occurs.”
LVHN CEO Dr. Brian Nester said in an interview Tuesday that the merger will make higher quality care more available and ultimately reduce the cost of care for patients.
“If we provide better care, it will be more accessible. [if] “Increasing patient engagement improves patient outcomes, eliminates hospital services and unnecessary treatments, and ultimately reduces the cost of care,” he said.
An LVHN spokesperson added that it was too early to comment on “hypotheticals” based on other states or territories.
Many things need to be decided before a merger takes place. A final agreement is still being negotiated, and the agreement will require state approval. Existing hospital leadership will remain in place.
It is unclear how the merger will affect the health network's staffing, particularly its administration, and what will happen if there is a rebranding.
But while the merger is certain to change the face of the existing rivalry between St. Luke's University Health Network and LVHN, Meyerhöfer said the two organizations will still compete, so it won't do much in the short term. He said he expected it to remain unchanged. region.
Following the announcement, St. Luke's President and CEO Rick Anderson issued a statement saying the St. Luke's network calls LVHN a “vibrant local competitor” and “will always respect and respect it.” He went on to say, “St. Luke's.'' Luke's remains focused on remaining the lowest cost provider of the highest quality care. ”
Meyerhoefer said merging Jefferson Health Plans into LVHN's operations will give the new health network authority over Medicaid and Medicare funds in the Lehigh Valley and surrounding areas.
But Meyerhöfer said the biggest change in the short term is in branding and public perception. He said St. Luke's has in recent years made Temple St. Luke's School of Medicine a key part of its branding to differentiate itself from LVHN, which has medical school programs at the University of South Florida. But Thomas Jefferson University is owned by Jefferson, and the Sidney Kimmel School of Medicine is highly regarded.
“We are confident that branding will promote educational attainment and change consumer perceptions,” Meyerhöfer said.
