Thomas Jefferson University Hospital, Philadelphia Thomas Jefferson University Hospital,Philadelphia

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PHILADELPHIA—The Federal Trade Commission has joined theCommonwealth of Pennsylvania in seeking to block the proposedmerger of Philadelphia's two major health care providers— Jefferson Health and Albert EinsteinHealthcare Network.

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The FTC reported on Thursday it had filed administrativecomplaint alleging that the proposed merger would reducecompetition in both Philadelphia and Montgomery counties. The FTCalso stated that it would seek a temporary restraining order and apreliminary injunction to prevent Jefferson Health and AlbertEinstein Healthcare Network from completing the merger. The FTC,jointly with the Pennsylvania Attorney General, stated it wouldfile a complaint in federal district court against the mergerdeal.

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According to the complaint, Jefferson and Einstein have ahistory of competing against each other to improve quality andservice, including by upgrading medical facilities and investing innew technologies. The proposed merger would eliminate the robustcompetition between Jefferson and Einstein for inclusion in healthinsurance companies' hospital networks to the detriment ofpatients, the FTC charges.

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"Patients in the Philadelphia region have benefitted enormouslyfrom the competition between the Jefferson and Einstein systems,"says Ian Conner, Director of the FTC's Bureau of Competition. "Thismerger would eliminate the competitive pressure that has drivenquality improvements and lowered rates. Throughout ourinvestigation, we have benefited from close cooperation with ourpartners in the Office of the Attorney General ofPennsylvania."

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The FTC complaint alleges that, as a result of the merger, theparties would control at least 60% of the inpatient GAC hospitalservices market in and around North Philadelphia, and at least 45%of that market in and around Montgomery County.

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The FTC vote to issue the administrative complaint and toauthorize staff to seek a temporary restraining order andpreliminary injunction was 4-0-1, with Chairman Joseph J. Simonsrecused. The administrative trial is scheduled to begin on Sept. 1,2020. The federal court complaint and request for preliminaryrelief was to be filed in the U.S. District Court for the EasternDistrict of Pennsylvania.

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The FTC and Pennsylvania Attorney General's actions were metwith criticism from US Rep. Dwight Evans (D-PA-3rd) andPennsylvania State Senator Christine M. Tartaglione(D-Philadelphia).

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Congressman Evans stated, "This is an outrageous action by theFederal Trade Commission and Pennsylvania Attorney General'sOffice. The proposed merger would provide enhanced stability andaccess to high-quality care for the residents of North Philadelphiafor the foreseeable future. I urge these agencies to drop thisill-considered action at once!"

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Sen. Tartaglione said in a prepared statement: "The merger ofJefferson Health and Einstein Healthcare Network would provide theresidents of North Philadelphia and the surrounding region withimproved access to high-quality, reliable medical care, so I amextremely disappointed that the FTC has chosen to challenge thisdefinitive agreement. As a safety net hospital within a largelyunderserved community, Einstein has long been committed to securingthe resources needed to deliver essential medical care to familiesin need. The merger with Jefferson would advance that noble missionand support community health for the foreseeable future."

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Officials with Jefferson Health and Albert Einstein HealthcareNetwork first announced their intent to merge back in March 2018.At the time, the two healthcare networks signed a Letter of Intentfor the merger deal and stated the proposed transaction would bringtogether "two historically linked academic medical centers whoseshared vision is to improve the lives of patients and theircommunities."

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John Jordan

John Jordan is a veteran journalist with 36 years of print and digital media experience.