Jefferson Health System to Restructure to Provide Autonomy and Agility for  Member Institutions

March 7, 2014

The Board of Trustees of Jefferson Health System (JHS) voted today to  restructure in order to provide the autonomy and agility that is required for  its members TJUH System, the parent entity of Thomas Jefferson University  Hospitals, Inc.; Main Line Health System (MLH); and Magee Rehabilitation  Hospital ֖ to respond to healthcare reform and pursue individual growth  strategies and priorities.  The organizations will continue to maximize  opportunities to work collaboratively.

The restructuring will enable each organization to  manage its own strategic decision-making and financial oversight while  continuing their existing joint programs, clinical services and academic  affiliations.  The restructuring will also allow TJUH System and Main Line  Health to pursue new ways of working with each other and create the flexibility  for each to explore other strategic relationships.  Similar opportunities will  be evaluated by Magee Rehabilitation Hospital.

TodayӒs healthcare environment requires that we  reimagine the way healthcare is delivered, said Stephen K. Klasko, MD, MBA,  President and CEO of Thomas Jefferson University and TJUH System.  ԓWe  collectively realized that the existing corporate structure needs to be changed  to allow us to be more entrepreneurial, nimble and responsive.  Jefferson looks  forward to an increasingly vibrant clinical and academic relationship with Main  Line Health.

Jefferson Health System does not provide direct  patient care.  JHS was formed  in 1995 to provide overarching business  management functions for its members, including consolidated capital acquisition  and financial oversight; joint contracting with payers; quality benchmarking;  development and management of new provider network structures, such as  the  ACO-PA, the JHS-affiliated Accountable Care Organization; joint purchasing;  self-insurance  for hospitals, physicians and other  providers; compliance  oversight; and internal audit.  TJUH System and MLH intend to continue jointly  operating ACO-PA and the insurance programs.

The restructuring will not impact the employees of  TJUH System, MLH or Magee Rehabilitation Hospital.  JHS has a relatively small  number of employees and each will be offered the opportunity to transition to  positions within TJUH System and/or MLH or will receive outplacement assistance  and severance packages. The JHS Board and member institutions expressed  gratitude to these employees for their exemplary service.

The transaction requires regulatory approval. The  definitive agreements will be finalized over the coming months with the  restructuring expected to close on July 1, 2014.