Photo by Intermountain Healthcare
Intermountain Healthcare and SCL Health, two nonprofit healthcare systems based in Salt Lake City, Utah and Broomfield, Colorado, respectively, have signed a letter of intent to merge and form a system of 33 hospitals and an insurance provider.
The systems plan to sign a definitive merger agreement by the end of the year and, pending the usual approvals, will finalize the deal in early 2022.
If all goes according to plan, the combined entity will employ more than 58,000 caregivers, operate 385 clinics in six states and provide health insurance to around 1 million people, according to the announcement.
The new system will adopt the name Intermountain and be headquartered in Salt Lake City, with a regional office in Broomfield, Colorado, at SCL. As a faith-based organization, SCL’s seven Catholic hospitals will retain their religious branding and continue to operate with their current practices.
Dr. Marc Harrison, President and CEO of Intermountain, will lead the merged organization. Lydia Jumonville of SCL will remain President and CEO of her organization for a two-year onboarding period until her transition to a position on the Board of Directors of the new system.
WHAT IS THE IMPACT
The two systems present their merger proposal as a model for how faith-based and secular health organizations can come together to expand their missions.
“SCL Health and Intermountain are continuing our merger from a position of strength,” Jumonville said in a statement. “We are two individually strong health systems that seek to improve the quality, accessibility and affordability of care. We will advance our missions and better serve the whole region together.
The merger could be stopped dead, however, given President Biden’s executive order cracking down on hospital consolidation. The mergers have left many regions, especially rural communities, without good options for convenient and affordable health services, according to the ordinance.
He encourages the Department of Justice and the Federal Trade Commission to enforce antitrust laws and to review and revise their merger guidelines to ensure that patients are not harmed by such mergers.
This is exactly what the FTC did last month after suffering a “tidal wave of merger cases.” The monitoring group announcement it was adjusting its review process and that companies that close their transactions before formal FTC approval risk seeing them unwind along the way.
THE BIGGEST TREND
Hospital advocacy groups, including the Federation of American Hospitals and the American Hospital Association, pushed back on Biden’s decree, saying integration and scale can be beneficial in meeting community needs, especially during a pandemic.
Even with the regulatory upheaval, hospital mergers and acquisitions have increased recently, with 13 deals announced in the first quarter of 2021, up from 29 in 2020. The trend is expected to continue throughout the year, according to Moody’s Investors Service.
Earlier this year, the FTC launched an investigation to determine the impact of past mergers on competition, hoping to use its findings to revamp its merger retrospective program.
Last year, Intermountain attempted to merge with Sanford Health, but following a change of management at Sanford, the merger was canceled.
Amid rising COVID-19 cases and hospitalizations, Intermountain announced this week that it was postponing all non-emergency surgeries and procedures requiring hospitalization at its trauma and community hospitals.
ON THE RECORD
“We are delighted to merge with SCL Health to usher in a new frontier for the health of communities in Intermountain West and beyond,” Harrison said in a statement. “US healthcare must accelerate the shift towards population health and worth, and this merger will quickly advance this cause across a wider geographic area. We will bring together best practices from both organizations to do even more to improve clinical excellence, transform patient experience and support healthy lives. “
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