- Sentara Healthcare and Cone Health are scrapping plans to merge after signing a letter of intent in August 2020. The deal was expected to close in the middle of this year pending regulatory approval, and would have created a 17-hospital, $11.5 billion system.
- Norfolk, Virginia-based Sentara is a nonprofit system with 12 hospitals in Virginia and North Carolina and its health plans serve over 800,000 members in Virginia, North Carolina and Ohio. Greensboro, North Carolina-based Cone Health is also a nonprofit with five hospitals in the state, and its two health plans serve 15,000 members.
- North Carolina Attorney General Josh Stein held a comment period in late April to gauge feedback on the merger, and received more than 40 responses, many touching on potential reduced competition in the market.
COVID-19 pressures didn't dampen merger and acquisition activity among health systems, and the trend is expected to continue post-pandemic, an April report from Moody's Investors Service contends.
While for-profits may hunt for deals focused on offerings outside the traditional hospital setting, nonprofits are likely searching for deals that will boost the scale of their operations by expanding into new markets, according to Moody's. Nonprofits have leaned on this strategy of consolidating for their financial benefit over the past decade, while for-profits currently have "unprecedented levels of liquidity" spurring interest in deals that meet patients outside hospital settings.
But a number of announced mergers between nonprofit systems have subsequently been called off, such as that between Sentara and Cone Health.
Sentara's board of directors and Cone Health's board of trustees came to a mutual agreement to end affiliation plans late last week and the two systems said their communities are "better served by remaining independent," according to a release.
Other recently called-off mergers include that between nonprofits CommonSpirit Health and Essentia Health. The two signed a letter of intent in January, though the deal fizzled in May, and Duluth, Minnesota-based Essentia would have acquired 14 CommonSpirit facilities in North Dakota and Minnesota, nearly doubling the size of its network.
In that instance, over 700 nurses and other medical workers filed a petition against the deal, saying they feared layoffs and restricted access to patient care as a result of the acquisition.
Plans to merge Midwestern hospital systems Advocate Aurora Health and Beaumont Health were also called off in October, amid pushback from doctors. The two systems signed a letter of intent to merge four months prior.
And in December, Intermountain Healthcare and Sanford Health called off plans to merge following the exit of Sanford's CEO over a mask controversy. The two nonprofit systems had planned to team up to operate 70 hospitals and 435 clinics, insuring 1.1 million people and generating an estimated $13 billion in combined annual revenue.