Reading Health’s Acquisitions ‘Could Redirect Some Patterns of Patient Referral’

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A strategic move by Reading Health took it into the Philly suburbs with a buyout of five hospitals, including Jennersville Regional, above. Image via HFR Design.

Looking for a shot in the arm, the Reading Health System just acquired a handful of hospitals to broaden its network and better leverage its new health insurance plan joint venture.

Reading Health formed the provider-payer plan with the University of Pittsburgh Medical Center in late 2016 and recently announced buyouts of four CHS hospitals in the Philadelphia suburbs and one in the city, according to a Philadelphia Business Journal report by John George.

They include Pottstown Memorial Medical Center, Brandywine Hospital, Phoenixville Hospital, Jennersville Regional Hospital, and Philly’s Chestnut Hill Hospital.


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“By involving a health insurer that can structure lower-cost coverage plans that incorporate financial incentives for looking to Reading and westward, instead of to the higher-cost providers in Philadelphia, the game changes,” said Temple University professor Stuart Fine.

“That’s called value-based insurance design, and it could potentially serve to redirect at least some patterns of patient referral.”

The transaction will be reviewed by regulators with an anticipated third-quarter close.

Read more about the hospital sale in the Philadelphia Business Journal here.

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