Jefferson, Main Line hospitals separating
Finances, bonds, swaps to part; joint services will continue
Jefferson Health System trustees voted this morning to approve a plan that will separate the Philadelphia-based hospital management system's finances -- debt, contracts with health insuers companies, compliance, audit -- from those of Main Line Health, which runs the Bryn Mawr, Paoli, Lankenau and Riddle hospitals, and the separate Magee Rehabilitation Hospital, according to an internal memo circulated to Main Line Health Foundation boards members.
"Both organizations concluded that it is necessary to separate our financial integration in order to achieve the autonomy and flexibility that the member organizations require," Main Line Health chief executive Jack Lynch and his system's hospital presidents wrote in a note to members of the Main Line board. (Updated)
Existing joint programs "will remain unchanged," and doctors, other medical staff and patients "will not be impacted," Lynch added. Joint research and patient care will continue; self-insurance for hospitals and providers will also be managed jointly; Paoli Hospital's Regional Trauma Center will remain affiliated with Thomas Jefferson University Hospital's Trauma Program, and Riddle will remain in the Jefferson Kimmel Cancer Center Network, among other joint ventures that will remain. Some Jefferson Health System employees (financial or management, not medical) will lose their jobs "or will receive outplacement assistance and severance packages," the memo added.
Jefferson Health System is also separating the group's bond finance arrangements. Jefferson will redeem or transfer bonds issued by the Pennsylvania Economic Development Financing Authority Health System in 2005, the Hospital and Higher Education Facilities Authority of Philadelphia in 2010, the Montgomery County Industrial Development Authority in 2012, and Jefferson's own 2012 taxable notes, amogn others. Jefferson will remain liable for Chester County and Monttgomery County authority bond sissued in 2010 and 2012, respectively. Jefferson will also finance the transfer or termination of interest-rate swap agreements issued in connection with some of the bonds.