Kaufman Hall Advises Lancaster General Health on Partnership with Penn Medicine

On April 21, the boards of Lancaster General Health (“LG Health”) and University of Pennsylvania Health System (“Penn Medicine”) jointly approved an agreement to have LG Health become a member of Penn Medicine. This partnership brings two highly successful and renowned organizations together to create a regional integrated healthcare provider network. The combination unites Penn Medicine, a top academic medical center, with LG Health, a community health system nationally ranked for its clinical quality. Now that a final agreement is in place, the parties will pursue state and federal regulatory agency approval of the transaction.

Kaufman Hall advised the board and senior management of LG Health by providing strategic counsel and analysis of the organization’s market position and the terms of the combination with Penn Medicine. In addition, Kaufman Hall supported LG Health in the development and negotiation of agreements with Penn Medicine, including governance and financial terms.

Read Kaufman Hall's perspective on academic health centers and considerations for their future success

The parties believe the partnership will allow both institutions to address the changing healthcare environment, as payment reform shifts the focus from hospital to community-based care, and organizations transform the delivery of care towards population health, wellness, and retail approaches to patient services.

LG Health’s agreement with Penn Medicine calls for a commitment for Penn Medicine to provide for the healthcare needs of the LG Health community for as long as LG Health may be affiliated with Penn Medicine. In addition, LG Health’s assets would continue to be used to advance the health and well-being of the LG Health community. LG Health’s governance would continue under its Board of Trustees, consisting of volunteer business and community members, LG Health’s CEO, and representatives of Penn Medicine. LG Health would also gain seats on the University of Pennsylvania Health System’s Board of Trustees. Finally, LG Health’s extensive community benefit efforts, including its charity-care policies, community health programs, and initiatives improving the health of the elderly, poor and other at-risk populations, would continue and be governed by the LG Health Board of Trustees.

“We extensively evaluated partners that could strengthen our not-for-profit mission of advancing the health of our community in this era of unprecedented healthcare reform,” said Thomas E. Beeman, President & Chief Executive Officer of Lancaster General Health. “Our choice, the University of Pennsylvania Health System, is an elite organization with the resources and expertise to truly transform healthcare. Together, our aim will be to enhance access to cost-effective, high-quality care, and to strengthen our complementary teaching and research missions.”

To learn more about how Kaufman Hall is assisting healthcare providers with partnership decisions, please contact Mark Grube and Bryan Burgett at 847.441.8780 or mgrube@kaufmanhall.com and bburgett@kaufmanhall.com.