Intermountain Healthcare and SCL Health on Thursday signed a letter of intent to merge.
If finalized, the merger will create an $11 billion health system across six states that will employ nearly 60,000 health care providers.
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Details on the merger
The merger is expected to close in early 2022 after the two health systems sign a definitive agreement at the end of this year. It will create an $11 billion health system with 33 hospitals and 385 clinics, employing 58,000 people across six states.
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Under the letter of intent, Intermountain CEO Marc Harrison will become president and CEO of the merged organization, which will maintain the name Intermountain Healthcare and be headquartered in Salt Lake City.
Meanwhile, Lydia Jumonville, CEO of SCL Health, will remain in her role during a two-year integration process and serve on the board of the combined health system.
Harrison said the American health care system "needs to accelerate the evolution toward population health and value, and this merger will swiftly advance that cause across a broader geography."
Jumonville said the health systems are negotiating the merger "from positions of strength."
"We are two individually strong health systems that are seeking to increase quality, accessibility, and affordability," she said. "We will advance our missions and better service the entire region together."
Some recent mergers have faced regulatory scrutiny
In recent years, some officials and regulatory bodies have expressed concerns about the growing trend of hospital mergers, Modern Healthcare reports.
In August, the Federal Trade Commission put out a statement saying, "Too many hospital mergers lead to jacked up prices and diminished care for patients most in need. … [H]ospital executives hatching merger plans should take note."
But Harrison said that since Intermountain's and SCL's service areas don't overlap, there should be no antitrust concerns.
"We have no geographic overlap and minimal payer overlap—if you can find two systems that are as committed to keeping costs down please show them to us, in the context of good quality," he said. "In many ways, we represent the model merger. We are trying to do the right thing; we're trying to move toward value, which has been one of the hallmarks of the Biden administration."
Jeff Goldsmith, president of Health Futures, agreed the merger doesn't appear to pose any antitrust problems.
"I don't see this as an anticompetitive issue because it is not an inside-market merger," he said. "The thing I have trouble understanding is that SCL hospitals are really great performers. What is Intermountain going to do to make them stronger? How are the patients in the communities affected by this merger and their direct care providers going to benefit?" (Kacik, Modern Healthcare, 9/16; Herman, Axios, 9/17; Commins, HealthLeaders Media, 9/16)