Erlanger Health System has signed a non-binding letter of intent (LOI) to join Prisma Health in a proposed strategic partnership that would bring $2 billion in capital investment to the Chattanooga-based health system.

The organizations said the partnership aims to strengthen Erlanger's long-term sustainability while expanding access to specialty care, investing in facilities and technology, and preserving key services, including the Level I Trauma Center, Children's Hospital, transplant programs, and safety-net operations. Prisma Health, based in Greenville, South Carolina, serves more than 1.6 million patients annually across 20 hospitals.

Under the proposal, Prisma Health would establish its East Tennessee regional headquarters in Chattanooga. Erlanger President and CEO Jim Coleman would become the Regional CEO for East Tennessee, while the Erlanger name, workforce, and local leadership structure would be retained. The organizations also said the partnership would support academic medicine, workforce development, and future growth throughout the region.

The LOI initiates a due diligence process, and any final agreement will require approval from Erlanger's Board of Directors, the Erlanger Health Oversight Panel, the Hamilton County Commission, and state and federal regulators. Both organizations emphasized that patient care and services will continue uninterrupted during the evaluation process.