An Acquired Taste
Mergers and acquisitions. It sounds more like a topic for MBAs than MDs. Yet the growing trend across the country is for health systems to merge with, acquire, or be acquired by other health systems. It’s the business of medicine and the wave of the future. Jefferson—so often ahead of the curve—has been riding the crest of that wave for the past five years.
From our acquisitions of other health systems in the Greater Philadelphia region and across the river in New Jersey to our merger with Philadelphia University, we have kept an eye on the rapidly changing, quickly evolving healthcare and education landscapes. For our academic medical center, the overarching goal is to provide an unparalleled education for the next generation of physicians, as we deliver the best patient care and conduct the most groundbreaking research.
Over the past two decades, health system consolidation has gained traction as larger entities purchase or merge with smaller ones, creating a win-win-win situation for patients, hospitals, and staff. Patients benefit from wider access to specialty and subspecialty services, clinical trials, and world-class physicians. Hospitals benefit from increased efficiency and cost savings through economies of scale—such as the consolidation of administrative services, personnel, laboratories, clinical services, and technology—as well as better access to resources for research and programs, and investment dollars to upgrade services at acquired hospitals. Healthcare professionals benefit through shareable electronic records, more coordinated patient care across the continuum, deployment and recruitment of additional medical staff to the acquired hospitals, and greater educational opportunities.
In 2018, Definitive Healthcare, which collects and analyzes industry trends in the U.S., identified 803 mergers and acquisitions and 858 affiliation and partnership announcements. Industry experts expect that trend to accelerate over the next few years; in 2014, Deloitte predicted that only half of the health systems operating that year would remain independent by 2024. This shift is happening with the approval of both physicians (a 2016 Deloitte survey found that 53% of physicians would consider merging with a larger healthcare organization) and patients (a recent PricewaterhouseCoopers Health Research Institute survey reports that 58% of consumers are likely to choose a community hospital that is affiliated with an academic medical center).
While Jefferson is following that merger‑and‑acquisition trend, we are also going one step further to shape how that movement progresses.
Since 2015, Jefferson has been expanding in both size and reach across the Delaware Valley. We are moving and shaking the worlds of medicine and education, disrupting the field of healthcare as we know it in order to create one that is even better.
Over the past five years, we have acquired Abington Health (2015); Aria Health (2016); Kennedy Health in New Jersey (2016); and Magee Rehabilitation Hospital (2018). All told, Jefferson Health now has more than 30,000 employees and is the second-largest employer in Philadelphia. Yet others are now in play, as we are always looking for the next dynamic partnership to add value to our institution and our mission of improving lives.
These mergers and acquisitions have all been accomplished while maintaining a strong balance sheet.
We are one of the fastest-growing health systems in the nation, yet while others have had to make drastic cuts, or have seen their bond ratings fall, we have more than doubled our operating revenue, and have kept our Standard & Poor’s rating intact with a solid A. That strong rating, along with financial stability, reinforces our long-term strategy to move forward as a leading, value-based healthcare system. Additionally, it has gained us international recognition as an ecosystem for higher education and innovation—because health isn’t all we do anymore.
Never an institution that is content with the status quo, Jefferson forms associations that transcend the boundaries of medicine and medical education. In 2017, we merged with Philadelphia University, adding its world-class professional education to Jefferson’s own, creating the opportunity to combine our health and science expertise with their nationally ranked programs in areas such as design, fashion, textiles, and architecture.
The idea behind our Medicine+Design program is to infuse more creativity into the way we care for patients by bringing a human-centered, design-thinking perspective to healthcare, generating innovative solutions to the challenges caregivers and their patients face every day. Within that program, second-year SKMC students have been teaming up, in four-member teams, with students from our East Falls campus to first identify clinical challenges to be solved and then solve them with design-based solutions. The creativity manifest in these JeffSolves projects has been nothing short of inspiring, generating a flow of biotech start-up concepts.
For example, earlier this year, a team of SKMC medical students and Kanbar College of Design, Engineering, and Commerce industrial design students decided to rethink the anesthesia face mask, with an ingenious design that mitigates the risk of escaping anesthesia gas in the operating theatre. Another student team, including one with textiles expertise, devised an elegant headband with multifunction textile layers that comfortably protect neonates in intensive care units from ambient noise. Other projects over the past few years have been equally far-ranging—from a fundamental redesign of the standard urinalysis cup to reduce bacterial cross-contamination of urine culture samples, to better layouts for emergency department and hospital rooms coming from teams of architecture and medical students.
We do not live in a world that is neatly compartmentalized—that is why Jefferson’s Innovation Pillar exists. It brings together scientists, clinicians, researchers, businesspeople, entrepreneurs, and inventors to create tomorrow’s solutions for today’s problems. It encourages collaboration with companies to create and manage the production and commercialization of inventions and discoveries. And it allows for the leaders of the future to explore the fields of medicine, design, architecture, engineering, and the like. This is something uniquely Jefferson; we consider it an obligation to serve as a bellwether for the future of healthcare and medical education.
At Jefferson, we are broadening the training of the next generation of healthcare providers, as well as allowing opportunities for cross-education in nonmedical fields to create more worldly professionals with the ability to become global thinkers. When worlds collide, great ideas are born. Jefferson increasingly sees itself as the academic and healthcare equivalent of the Big Bang—expanding horizons that nurture great ideas to make the world a better, healthier place.