Becker's Hospital Review

19 CFO / FINANCE 8 hospital mergers, acquisitions called off By Alia Paavola H ere are eight hospital mergers or ac- quisitions called off from May 2020 to June 2, 2021: 1. Norfolk, Va.-based Sentara Healthcare and Greensboro, N.C.-based Cone Health abandoned their plans to merge into an $11.5 billion system, the organizations said in a joint statement June 2. e health systems said they mutually agreed to end the plans in late May. Leaders said they believe their respective organizations will be better served by remaining independent. e two health- care systems announced plans to combine last August. e deal would have formed an $11.5 billion system with 17 hospitals in Vir- ginia and North Carolina. 2. Duluth, Minn.-based Essentia Health and Chicago-based CommonSpirit Health abandoned a deal that would have added 14 hospitals and three clinics to Essentia Health's network. e organizations said they were "unable to come to an agreement that would serve the best interests of both orga- nizations, the people [they] employ and the patients [they] serve." e two organizations announced the end of negotiations May 18. CommonSpirit and Essentia signed a letter of intent in January to explore the sale, under which CommonSpirit-owned facilities oper- ating under the CHI Health brand in North Dakota and Minnesota would have joined Essentia Health. e deal included a full-ser- vice tertiary hospital in Bismarck, N.D., and 13 critical access hospitals, as well as associ- ated clinics and living communities. 3. Sioux Falls, S.D.-based Sanford Health said March 15 that it was no longer pursu- ing a merger with Salt Lake City-based In- termountain Healthcare. Sanford and Inter- mountain announced in October 2020 that they had inked a letter of intent to merge, with completion of the deal expected in 2021. e combination would have created a $15 billion, 70-hospital system. e deal was canceled aer Sanford indefinitely sus- pended merger discussions in early Decem- ber because of the abrupt exit of its longtime president and CEO, Kelby Krabbenho. 4. Macon, Ga.-based Atrium Health Navi- cent and Warner Robins, Ga.-based Houston Healthcare abandoned a plan to combine, according to a joint statement obtained by Becker's Hospital Review on Feb. 25. e hos- pital systems said the decision to end their "strategic combination" was mutual and a result of the COVID-19 pandemic. e two Georgia health systems began talks to align their organizations in late 2017. It was never considered a merger or acquisition. 5. Advocate Aurora Health, which has dual headquarters in Milwaukee and Downers Grove, Ill., and Southfield, Mich.-based Beaumont Health called off their merger Oct. 2, 2020. e proposed merger faced criticism from some staff at Beaumont, in- cluding physicians, nurses and donors. In August 2020, the Beaumont board of trust- ees confirmed it would delay a vote on the planned merger. e trustees decided to postpone the vote aer seeing the results of a survey, completed by 1,500 of the sys- tem's 5,000 physicians, that revealed a lack of confidence in Beaumont's leadership and concerns about its proposed merger with Advocate Aurora. e merger of Beaumont and Advocate Aurora would have created a $17 billion system with 36 hospitals. 6. County officials overseeing Ventura (Ca- lif.) County Medical Center ended merg- er talks with San Francisco-based Dignity Health in July 2020 aer leaders from both parties deemed an affiliation too risky. Bill Foley, the director of the Ventura County Health Care Agency at the time, said Dignity officials considered it a risk to take on public hospitals, while county managers were con- cerned they would give up control but still face risk for buildings and finances. County officials also were concerned VCMC would lose its designation as a public hospital un- der either a lease or a contract with Dignity, which would put roughly $150 million in an- nual funding at risk. 7. Southfield, Mich.-based Beaumont Health called off a proposed merger with Akron, Ohio-based Summa Health in late May 2020. ey ended talks about five months aer signing a definitive agreement, under which Summa Health would have become a subsid- iary of Beaumont. e proposed deal, which already had received all necessary regulatory approvals, would have created a nonprofit system with 12 hospitals and $6.1 billion in annual revenue. 8. Four Chicago hospitals signed a letter of intent in January 2020 to combine into a single health system. e four hospitals, Ad- vocate Trinity Hospital, Mercy Hospital and Medical Center, South Shore Hospital and St. Bernard Hospital, called off the deal about four months later aer government funding for the $1.1 billion plan fell through. n New York health system lays off workers By Alia Paavola H ealthAlliance of the Hudson Valley, a three-hospital system in the Westchester Medical Center Health Network, laid off an undisclosed number of workers June 14, according to the Daily Freeman. Westchester Medical Center Health Network in Valhalla, N.Y., said it laid off HealthAlliance hospital employees in Kingston, N.Y., to eliminate redundan- cies as it begins to consolidate inpatient services to one location. "The next phase of consolidating the operations of two hospitals into one hospital will result in position redundancies," WMC Health said in a news re- lease obtained by the Daily Freeman. "As such, some reduction in our work- force is necessary for operational efficiencies and responsible fiscal manage- ment of the organization." Westchester Medical Center acquired Kingston-based HealthAlliance of the Hudson Valley in 2016. The plans to consolidate inpatient services to one lo- cation have been in the works since 2013, according to the report. HealthAlliance plans to upgrade and expand its Mary's Avenue Campus in Kingston and make its Broadway Campus in Kingston into a medical village without inpatient care. HealthAlliance's third hospital, a critical access hospital, is not involved in the plans. n

• Cover