New Mexico-based Presbyterian Healthcare Services and Iowa-based health system UnityPoint Health are weighing the possibility of creating a new healthcare organization, which would function as a parent company for both not-for-profit health systems. Among the goals for the move would be making greater investments in clinical excellence, digital innovation, workforce development and value-based care while lowering overall administrative costs.
As the Des Moines Register noted, the announcement came just one day after MercyOne, Iowa's other dominant health care system, announced it had become the new parent company of Genesis Health System. The Davenport-based organization operates six medical centers in Eastern Iowa and Western Illinois.
Combined, UnityPoint Health and Presbyterian impact the lives of four million patients and members through more than 40 hospital facilities, hundreds of clinics and significant health plan operations. The two organizations collectively have a 40,000-person workforce, including nearly 3,000 physicians and advanced practice clinicians working alongside independent clinicians, educational partners and colleges.
Regulators are getting tougher on proposed hospital system mergers. As a July 2022 Kaiser Health News story points out, the Federal Trade Commission has objected to several recent deals. Here are a few examples: HCA Healthcare, which operates 182 hospitals, halted its acquisition of five Steward Health Care System hospitals in Utah shortly after the FTC filed a lawsuit to block the transaction, claiming it would raise prices and lower the quality of care. In February 2022, a proposed merger between Rhode Island’s two largest hospital systems, Lifespan and Care New England Health System, was cancelled after the FTC and the Rhode Island attorney general filed a lawsuit to stop the deal.
Some similar and even larger deals, however, have gone through. The 27-hospital Advocate Aurora Health based in the Chicago suburb of Downers Grove, Ill., and Milwaukee, Wis., is being allowed to combine with the 40-hospital Atrium Health, which is based in Charlotte, N.C.
The proposed merger between Presbyterian and UnityPoint would see both systems preserve their brands.
“As a not-for-profit health system, we must pave a sustainable path forward to continue serving our communities with care and coverage. While we’ve done that successfully independently, we know that partnering with like-minded health systems will allow us to accelerate our efforts,” said Dale Maxwell, president and CEO, Presbyterian Healthcare Services, in a statement. “UnityPoint Health shares in our commitment to keeping healthcare delivery local and creating a culture where the workforce thrives which will serve as foundational elements as we embark on this journey.”
“UnityPoint Health and Presbyterian are two organizations rooted in similar values,” says Clay Holderman, president and CEO of UnityPoint Health, in a statement. “By lowering administrative costs, building new capabilities and increasing investments in innovation and clinical excellence, our intent is to help improve affordability and accessibility of care. We’re excited about the unique possibilities ahead.”
Both systems said they would now pursue a period of greater evaluation and exploration of next steps towards a definitive agreement and regulatory approvals.
