Presbyterian Healthcare Services and UnityPoint Health have ended their merger plans, the nonprofit health systems said Wednesday.
Albuquerque, New Mexico-based Presbyterian and Des Moines, Iowa-based UnityPoint had planned to form a roughly $11 billion system with 48 hospitals in Illinois, Iowa, New Mexico and Wisconsin. The organizations announced the signing of a letter of intent to merge on March 2 and a definitive agreement on March 30.
Related: Proposed merger guidelines may limit cross-market hospital deals
Neither health system offered any specifics as to why the organizations walked away from the prospective transaction. The combination was one of the most recent in a string of proposed or completed cross-market health system mergers, which face stricter oversight from state and federal officials.
Sally Gray, UnityPoint's board chair, said in a statement that the decision to remain separate allows the health system “to better meet the needs of our patients, team members, communities and key stakeholders.”
Presbyterian President and CEO Dale Maxwell said in a statement that the goal of the proposed merger was to “strengthen local, not-for-profit healthcare in the face of mounting cost pressures across the industry, and that goal remains unchanged with today’s news.”
As a result of the proposed merger falling through, Clay Holderman, former president and CEO of UnityPoint, left the health system “to explore other opportunities,” according to a news release. The UnityPoint board appointed Scott Kizer, former chief legal officer of the health system, as Holderman’s successor.
Other recently proposed cross-market hospital transactions have also failed. In July, Sioux Falls, South Dakota-based Sanford Health and Minneapolis-based Fairview Health Services dropped their plans to merge, citing a lack of support from Minnesota stakeholders. A Minnesota law that went into effect earlier this year allows the attorney general to veto a proposed healthcare transaction if it is determined to not be in the public’s best interest.
The Federal Trade Commission and Justice Department proposed new merger guidelines earlier this year designed to crack down on anticompetitive consolidation. The proposed guidelines may limit cross-market health system consolidation, policy experts said last week during a forum discussing the proposed guidelines.
