The number of hospital mergers, acquisitions, joint ventures, affiliations or partnerships that were unwound or abandoned in 2023 sits in the double digits.
In a number of cases, Federal Trade Commission intervention, state regulatory reviews and the financial and economic environment contributed to decisions to dissolve or walk away from transactions.
The Justice Department and FTC have been active in challenging mergers and acquisitions under the Biden administration, and FTC involvement was an expected risk for systems pursuing deals this year. Industrywide, it also has been a year of slower M&A activity among healthcare organizations and a "grim" time for many big-ticket deals to materialize meaningful synergies or earnings growth.
Here are 10 ties between health systems that were unwound or deals that were abandoned before completion in 2023, in reverse chronological order:
1. Walnut Creek, Calif.-based John Muir Health called off plans in December to acquire San Ramon (Calif.) Regional Medical Center from majority owner Tenet Healthcare, which is based in Dallas. The decision was announced one month after the FTC sued to block the deal; the health systems decided not to pursue the challenge "due to the cost and disruption of litigation."
2. Baton Rouge, La.-based Franciscan Missionaries of Our Lady Health System and Ocean Springs, Miss.-based Singing River Health System mutually called off negotiations in October for a deal in which the former would acquire the latter. Talks between the organizations began in March.
3. Albuquerque, N.M.-based Presbyterian Healthcare Services and West Des Moines, Iowa-based UnityPoint Health called off a planned $11 billion merger in October. The systems said they had reached an agreement after "significant planning and consideration." No official reason was given immediately for the decision. The merger would have created a cross-regional system with nearly 50 hospitals.
3. Louisville, Ky.-based Norton Healthcare and Brentwood, Tenn.-based LifePoint ended a joint venture known as Regional Health Network of Kentucky and Southern Indiana in August. Norton Healthcare took on full ownership of two hospitals in Indiana upon the joint venture's unwinding.
4. Centennial, Colo.-based Centura Health folded into CommonSpirit Health in August, with the Chicago-based system now managing 20 Centura hospitals with plans to retire the Centura brand. CommonSpirit Health and Altamonte Springs, Fla.-based AdventHealth announced in February an end to their Centura Health joint venture, with AdventHealth now managing and operating five of the hospitals that were part of the Centura system.
5. Sioux Falls, S.D.-based Sanford Health and Minneapolis-based Fairview Health Services in July halted their merger efforts to form a 50-hospital after rolling out the plan to combine in November 2022.
6. Tewksbury, Mass.-based Covenant Health in March called off its plan to acquire Day Kimball Healthcare, a health system based in Putnam, Conn. The proposed deal faced opposition from a group of local residents concerned that Covenant, a Catholic health system, would limit services provided at independent Day Kimball, particularly reproductive services.
7. New Bern, N.C.-based CarolinaEast Health System ended its partnership with Chapel Hill, N.C.-based UNC Health in March. The affiliation was formed in May 2021. CarolinaEast CEO Michael Smith said in a news release that it is no longer in the best interests of both health systems to maintain the affiliation agreement.
8. State University of New York Upstate Medical University and Crouse Health abandoned in February 2023 their plans to merge, which were proposed in April 2022 by the Syracuse, N.Y.-based systems. The FTC had voiced opposition to the deal, claiming it would leave Syracuse with just two hospital systems — Upstate and St. Joseph's Health — and give the combined entity a 67 percent share of commercially insured inpatient services in Onondaga County.
9. West Reading, Pa.-based Tower Health and Philadelphia-based Penn Medicine announced in February their decision to no longer pursue a strategic alliance, which was unveiled in July 2021. The systems said they will continue to work together in "areas of mutual interest."
10. Worcester, Mass.-based UMass Memorial Health and Gardner, Mass.-based Heywood Healthcare called off affiliation plans in January. The systems had signed a nonbinding letter of intent in May 2022 to explore Heywood joining UMass Memorial Health, but UMass Memorial President and CEO Eric Dickson, MD, said "the difficult healthcare environment" makes it an inopportune time for the corporate affiliation.