Hospital and health system merger and acquisition activity increased 27% year over year in 2023, and 2024 is already off to a busy start.
Among the biggest announcements, the University of Pennsylvania Health System in Philadelphia and Doylestown (Pa.) Health signed a nonbinding letter of intent to explore if Doylestown will become part of Penn Medicine, a six-hospital system.
The proposed transaction would lay the foundation for the development of new clinical programs and expanded services across the greater Philadelphia region, Penn Medicine said. It would also build on existing clinical integration in cancer care between the systems.
In neighboring New Jersey, Jersey City-based CarePoint Health and Hudson Regional Hospital in Secaucus signed a letter of intent to combine under a new management company, Hudson Health System, which will incorporate the acute care facilities of both organizations. It would be a four-hospital system that includes nonprofit and for-profit hospitals and continue to be in network with all major payers.
The first weeks of the year also saw deals involving rural hospitals. Hills & Dales Healthcare, based in Cass City, Mich., and UnitedHealthcare Partners, based in Marlette, Mich., have joined forces to create a three-hospital system. The new organization will be known as Aspire Rural Health System and aims to update and expand existing facilities, invest in new ones and "maintain and enhance the immediate and long-term viability of the combined system."
Huntsville (Ala.) Hospital Health System is planning to acquire Fort Payne, Ala.-based DeKalb Regional Medical Center in a deal expected to close March 31. Huntsville Hospital Health System CEO Jeff Samz said the acquisition will help the 134-bed rural hospital access local resources it does not have.
Several deals that were announced last year were finalized at the beginning of 2024:
- Cape Girardeau, Mo.-based SoutheastHealth joined St. Louis-based Mercy.
- Jefferson City, Mo.-based Capital Region Medical Center completed its integration into Columbia-based University of Missouri Health Care.
- St. Louis-based BJC HealthCare and Kansas City, Mo.-based Saint Luke's Health System finalized their merger.
- Milwaukee-based Froedtert and Neenah, Wis.-based ThedaCare launched its merged system.
The beginning of the year has also seen a major deal called off. Duluth, Minn.-based Essentia Health and Marshfield (Wis.) Clinic Health System ended efforts to combine into a 25-hospital regional health system. The systems said they decided that a combination was not the right path forward for their respective organizations, patients and colleagues at this time. Less than a week after the announcement, Marshfield announced it is furloughing 3% of its workforce to help hit its financial turnaround goals.