Announced in the fall, Aria Health’s merger with Jefferson University has now been finalized. It brings Aria’s two hospitals in Philadelphia and one in Bucks County under the Jefferson umbrella.
Under the agreement, Aria will designate an equal number of members to Jefferson’s expanded board of governance.
“The benefit of this is this is a truly integrated model,” said Laurence Merlis, chief operating officer for Jefferson Health.
The merger will enable both entities to provide better care inside and outside the hospital, Merlis said, as well as manage larger populations.
“There’s a recognition that you need to be able to have the scale to make the investments necessary to achieve that triple aim,” he said.
The move follows Jefferson’s merger with Abington Health just last year, and it comes at a time when health care mergers are happening across the country, according to Robert Field, a professor of health law and policy at Drexel University.
Field said health system consolidations can have potentially positive and negative impacts on patients. He likens the phenomenon to what has happened with larger supermarkets replacing corner grocers.
“It’s good. There’s better one-stop shopping. You can have more variety of goods,” he said. “But in the long run, you will see higher costs and you will end up paying for it.
“Once you’re in a bigger health system, care can be coordinated better, they can have electronic record systems so that they can keep track of you and not lose paper. They can send you to the right specialist,” Field said. “The problem is when health systems get big enough, they get too powerful in terms of extracting money, and costs tend to go up.”
Field points to Health Partners in Boston as an example.
Merlis, however, said merging enables Jefferson to improve patient care while lowering the cost, given the economies of scale it hopes to achieve.
The Aria merger makes Jefferson one of the largest health entities in the region, with about 20,000 employees and 2,000 inpatient beds.
The system, which has more than $4.5 billion in annual revenue, also has plans to bring in Kennedy Health in South Jersey, and partner with Philadelphia University.
According to the Delaware Valley Healthcare Council, based on the number of licensed, staffed beds and reported number of inpatient care days, Jefferson Health is the largest health system in the five-county region of Southeastern Pennsylvania. Penn Medicine is larger, when including its Lancaster branches.