Jefferson Health plans acquire the Aria Health System to form a network for eight hospitals in southeast Pennsylvania and southern New Jersey.
The health systems have signed a non-binding, 90 day letter of intent to integrate Aria into Jefferson Health, they announced Tuesday.
Completion of a definitive agreement is expected in late spring 2016.
Financial details were not disclosed.
Jefferson Health in Philadelphia, formed in May as the combined entity of Abington Hospital in Pennsylvania and Jefferson. The health system has five hospitals, including the academic medical center, Thomas Jefferson University Hospital.
Aria Health has three acute care hospitals in Northeast Philadelphia and Lower Bucks County.
It had been exploring the possibility of integrating with another health system for a number of years. It needed to make investments in information technology, outpatient services and physician alignment; improve the ability to participate in risk-bearing payment models; move towards population health; and lower the per-person cost of healthcare, Aria said in a statement.
Aria considered a number of strong proposals from potential suitors, it said, not identifying the prospective health systems. Jefferson was deemed the best fit.
For Jefferson, "Aria Health brings critical capabilities as a high-quality, cost-efficient community health system," said Dr. Stephen Klasko, president and CEO of Thomas Jefferson University and Jefferson Health.
No changes are expected in the immediate future for patients, employees or physicians at either organization.