Lehigh Valley

St. Luke's, Sacred Heart to merge health systems

Deal expected to be completed by early 2018

ALLENTOWN, Pa. - The Lehigh Valley healthcare landscape continues to shift with the announcement Tuesday that two health systems have merged.

St. Luke's University Health Network and the Sacred Heart Health Care System announced a merger Tuesday at Sacred Heart's campus in Allentown.

"I wouldn't say you marry up, but you marry equal, and you get a strong organization and get better in both," Rick Anderson, St. Luke's president and CEO told 69 News.

The merger combines Sacred Heart's nearly 1,100 employees and 32,000 annual emergency room visits with St. Luke's more than 11,000 employees and 230,000 annual emergency room visits across seven campuses.

The boards of directors for each organization signed a merger agreement on September 15. The merger must now be approved by regulatory agencies, which officials said they expect to have in hand by early 2018.

"Independent hospitals struggle like small business struggle, competing against larger networks for funds, for patients that have insurance," said Pennsylvania Rep. Peter Schweyer, a Democrat. "It's a tough sled."

Sacred Heart CEO John Nespoli said partnering with St. Luke's offers a secure financial blanket, while maintaining its faith-based Catholic mission.

"Take on challenges of declining enrollment," he said. "Being part of a network opens up a world of opportunity for our employees and our doctors."

St. Luke's said it doesn't expect to shed any jobs and has opportunities within its seven-county reach.

"We have a thousand openings, and there are opportunities for those in good standing to apply for those jobs," Anderson added.

Tuesday's announcement came a week after St. Luke's announced a merger with Blue Mountain Health System and a day after officials in Bethlehem Township, Northampton County, approved plans for a $100 million expansion of the network's Anderson Campus.

Officials said no money will change hands as part of the proposed merger.

"This transaction is not about money," according to a prepared statement. "It is about continuing to provide quality services to Sacred Heart patients and all the residents of Lehigh County."

The Sacred Heart merger marks the fifth hospital to come under the St. Luke's umbrella since 1995, when St. Luke's took over Quakertown Hospital in Bucks County. The network also merged with Allentown Osteopathic Hospital in the 1700 block of Hamilton Street in 1997; Miner's Hospital in Coaldale in 2000 and Warren Hospital in Phillipsburg, New Jersey, in 2012.

The merger agreement dictates that St. Luke's will offer employment to all Sacred Heart employees and that Sacred Heart hire dates will "determine seniority and benefit eligibility after the merger."

In a prepared statement, the chairman of Sacred Heart's board of directors said the merger will ensure that the healthcare needs of Lehigh Valley residents will continue to be met.

"This affiliation agreement was made with the best interests of our patients, our physicians, our employees and our community in mind," board Chairman Paul Huck said. "St. Luke's long history of enriching the hospitals that join its network make it the ideal partner."

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