- BJC HealthCare and Saint Luke’s Health System announced Wednesday they had signed a non-binding agreement to merge, creating a $10 billion health system serving patients in Missouri, Kansas and Illinois.
- The 28-hospital system would keep their current brands and operate from two headquarters, with the St. Louis base focusing on eastern Missouri and southern Illinois, while the Kansas City, Missouri, headquarters serves western Missouri and parts of Kansas.
- BJC and Saint Luke’s said they’re planning to reach a definitive agreement “in the coming months,” assuming no regulatory hurdles. They expect the deal to close by the end of the year.
Health system mergers held steady in the first quarter of the year, though an April report from Kaufman Hall predicted “new wave of transaction activity” in the wake of the COVID-19 pandemic.
Cross-regional mergers are also on the rise as partners pursue growth and diversification without the regulatory scrutiny heaped on systems that operate in the same markets.
Advocate Aurora Health and Atrium Health closed their deal late last year to form Advocate Health, a $27 billion system operating in six states. UnityPoint Health and Presbyterian Healthcare Services are also planning to merge, which would create a system in Illinois, Iowa, New Mexico and Wisconsin.
But New Orleans-based LCMC Health hit a wall when it tried to buy three Tulane University Medical Center system hospitals from HCA Healthcare, even though it had received a certificate of public advantage, or COPA, from the Louisiana attorney general.
Antitrust regulators have sought to modernize merger guidelines, and earlier this year the Department of Justice withdrew “outdated” policy statements that aimed to signal what kinds of conduct are likely and unlikely to draw regulator’s attention.
St.-Louis based BJC and Kansas City-based Saint Luke’s both currently operate 14 hospitals. They had previously partnered as part of the BJC Collaborative, a group of systems that formed in 2012 aiming to pool their resources to reduce costs and improve quality and population health across neighboring systems.
If the deal closes, BJC president and CEO Richard Liekweg will serve as chief executive of the combined system. The Board Chair of the integrated system will join from Saint Luke’s.
“Amid the rapidly changing healthcare landscape, this is the right time to build on our established relationship with Saint Luke’s,” Liekweg said in a statement. “With an even stronger financial foundation, we will further invest in our teams, advance the use of technologies and data to support our providers and caregivers, and improve the health of our communities. These are opportunities that we can better achieve together.”
Correction: A previous version of this article misstated the initial board composition. The Board chair from Saint Luke's will be appointed to the board after the merger.