Tufts Medical Center and Boston Medical Center have backed off from their proposed merger.
The two academic medical centers announced in December that they would “explore a partnership,” but said Wednesday that they decided against it. They gave little explanation for the cancelled negotiations.
Similarly, officials at BMC and Boston-based Tufts didn't offer any reasons for their initial decision to create that partnership when merger discussions were announced last year. They only stated that a merger would combine the organizations' strengths.
The Massachusetts Health Policy Commission had initially said that the potential merger would “constitute a significant change in the Massachusetts health care market.” The state agency reviews all mergers to determine if consolidation is likely to increase healthcare costs or reduce competition.
Kate Walsh, BMC's president and CEO, and Dr. Michael Wagner, president and CEO for Tufts Medical Center and Floating Hospital for Children, said the two systems will remain open to future collaboration.
“We have had thoughtful conversations and considered different options for tackling the complex task of integrating two vital, but different, academic medical centers,” they said in a statement. “After much consideration, we have determined that, at this time, it is best for our medical centers to remain separate.”
Walsh and Wagner were both unavailable for interviews.
In many merger agreements, one party is often looking for a capital infusion or a financial boost. Boston Medical Center was in the red with a $781,000 operating deficit in the six months ended March 2014, but came away with a $9.7 million operating surplus during the same period this fiscal year.
Strategic, non-merger agreements have offered an alternative for hospitals who want to collaborate and realize efficiencies but don't want to cross finances or cultures.
This story originally reported that Boston Medical Center ended fiscal 2014 with an operating deficit. It has been updated with a correction.