Dive Brief:
- Danbury, Connecticut-based Nuvance Health announced plans to join New York-based Northwell Health on Wednesday.
- The deal, which is pending regulatory review, would create a 28-hospital health system with over 14,500 providers, according to the hospitals’ announcement.
- Northwell bills itself as the largest health system in New York state. The deal would allow Northwell to extend its presence into Connecticut and make “significant investments” into Nuvance, according to the announcement.
Dive Insight:
Nuvance Health, which formed via a 2019 merger between Western Connecticut Health Network and New York-based Health Quest, operates seven hospitals across Connecticut and New York.
The nonprofit health system has recently faced financial challenges. Nuvance logged a $164 million operating loss in its fiscal year ended Sept. 30, 2023. Last summer, credit rating agency Moody’s downgraded the provider’s revenue bond rating due to concerns about the system’s “weakened operating performance and reduced liquidity.”
Northwell is profitable. The New Hyde Park, New York-based nonprofit health system employs 85,000 people across 21 hospitals, according to its website. In the nine months ended Sept. 30, 2023, Northwell reported $135 million in operating income.
The proposed deal would combine the health systems’ clinical capabilities, purchasing power and infrastructure to accelerate innovation, according to the announcement. It may also help the systems attract and retain talent.
Hospital mergers — particularly when one system is experiencing financial distress — are becoming increasingly common, according to a recent report from Kaufman Hall.
In 2023, the research firm found that nearly a third of transactions were driven by a health system’s financial distress — the highest proportion in recent history, the consultancy said.
