Big deals: Looking at the major hospital mergers of 2023

After a couple of years of relatively quiet merger activity in the hospital industry, the pace picked up in 2023.

Kaiser Permanente plans to acquire Geisinger Health, the Pennsylvania-based system. (Image: Geisinger, Mark Dastrup)

By the end of the third quarter of 2023, there were 53 hospital mergers or acquisitions announced this year, a number which matched the total of deals in all of 2022, according to data from Kaufman Hall. Hospital deals had slowed due to the COVID-19 pandemic, but analysts say they expect to see more hospital consolidation in the coming year.

Perhaps foreshadowing the year ahead, Jefferson announced Tuesday that it plans to acquire the Lehigh Valley Health Network. If regulators approve the deal, the merged system would operate 30 hospitals and 700 sites of care. The organizations have signed a letter of intent to come together and hope to close the deal in 2024.

Some deals are being driven by financial necessity. Kaufman Hall estimated that over a third of the transactions in the third quarter were driven at least in part by financial distress.

Here’s a rundown of the biggest and most noteworthy hospital deals that were announced or came together in 2023.

Kaiser Permanente and Geisinger

This deal, also involving the state of Pennsylvania, may have commanded the most attention of any transaction in 2023.

Kaiser Permanente announced plans in April to acquire Geisinger, based in central Pennsylvania. Kaiser plans to form a new organization, Risant Health, and Geisinger is the first member. Eventually, Kaiser aims to acquire more local health systems under the Risant banner.

Leaders of both systems say the deal will accelerate the move to value-based care.

Kaiser Permanente, based in California, operates 39 hospitals, hundreds of medical clinics, and a health plan with more than 12 million members. Geisinger runs 10 hospital campuses, scores of clinics and a health plan with more than 500,000 members.

BJC and Saint Luke’s

BJC HealthCare and Saint Luke’s Health System said in November that they have entered a definitive agreement to merge the two hospital systems. The Missouri-based systems will form a combined organization with 28 hospitals and $10 billion in revenue.

They first signed a letter of intent to come together in May 2023, and BJC and Saint Luke’s said in a news release that they have completed their reviews by regulators.

When the deal closes, Saint Luke’s will join BJC HealthCare.

Henry Ford Health and Ascension Michigan

The systems are describing this as a joint venture, and not a merger. Still, it’s one of the biggest announced partnerships of the year.

Henry Ford Health and Ascension Michigan say they are planning to form a new system with a combined $10.5 billion in revenue. Several Ascension hospitals in southeast Michigan will be joining with Henry Ford, which is based in Detroit. The systems say no cash transaction is taking place.

Robert Riney, president and CEO of Henry Ford, would lead the new, combined organization. A governing board of the new organization would include members from Henry Ford and Ascension, the systems said.

University of Michigan Health and Sparrow Health

This deal was announced in late 2022, but University of Michigan Health and Sparrow Health System announced in April that they had joined forces into one organization. With U-M Health’s acquisition of Sparrow, the system is a $7 billion organization with 11 hospitals, along with scores of other care sites.

Froedtert and ThedaCare

Two Wisconsin-based systems, Froedtert Health and ThedaCare, announced their merger plans, and the boards signed off on their consolidation in September. The organizations are looking to create a new system that would include 18 hospitals and many other care sites.

The systems announced Tuesday that they have indeed finalized their deal and are looking to launch as a combined organization on Jan. 1.

Essentia and Marshfield

Essentia Health, based in Minnesota, and the Marshfield Clinic Health System, based in Wisconsin, said in October 2022 that they were discussing a merger. They announced in July that they’ve signed an agreement to come together. If Essentia and Marshfield Clinic merge, it would create a system of 25 hospitals and more than 26,000 employees.

CommonSpirit expands in Utah

CommonSpirit Health picked up five additional hospitals in Utah this year. The Catholic health system announced in May that it had completed a deal to purchase five Utah hospitals from Steward Health Care in February.

The five hospitals are: Salt Lake Regional Medical Center in Salt Lake City; Davis Hospital and Medical Center in Layton; Jordan Valley Medical Center in West Jordan; Jordan Valley Medical Center-West Valley Campus; and Mountain Point Medical Center in Lehi.

CommonSpirit tapped Centura Health to manage the Utah hospitals.

Novant Health expands

Novant Health reached an agreement to buy three South Carolina hospitals from Tenet Healthcare at a cost of about $2.4 billion. The organizations announced the deal in November.

Under the deal, Novant would acquire Hilton Head Hospital in Beaufort County, Coastal Carolina Hospital in Jasper County, and East Cooper Medical Center in Charleston County.

Novant Health also expanded in North Carolina. Novant purchased two hospitals from Community Health Services: Lake Norman Regional Medical Center, an acute care hospital in Mooresville, and Davis Regional Medical Center in Statesville. Novant also bought Pender Medical Center, a small, rural hospital, in North Carolina in June.

Oregon Health & Science University and Legacy Health

Oregon Health & Science University and Legacy Health said in August that they have signed a letter of intent to merge, bringing together two large providers in the Portland region. If regulators sign off on the deal, the two organizations will form a 10-hospital system.

Legacy, which has struggled financially, would become a part of OHSU. The organizations say they expect the deal to be completed in 2024.

Tampa General completes acquisition

Tampa General Hospital acquired the Bravera Health network from Community Health Systems, Inc. Tampa General said Dec. 1 it had completed the deal, which includes three hospitals and other sites of care. The group of hospitals and affiliated care sites has been redubbed TGH North.

UF Health expands

University of Florida Health and Flagler Health+ came together in September, months after announcing consolidation plans. The regional health provider will now be known as UF Health St. Johns, officials said in September.

Flagler Health includes a 335-bed hospital in St. Augustine and other sites of care. Under the agreement, the hospital will be renamed UF Health Flagler Hospital.

West Virginia systems form new academic health system

Marshall University, Marshall Health and the Mountain Health Network have officially come together.

The institutions announced the formation of the new academic health system in October The newly formed system is now known as the Marshall Health Network. The network includes the four hospitals that had been under the Mountain Health Network umbrella. It also includes Marshall University’s Joan C. Edwards School of Medicine.

Aspirus and St. Luke’s of Duluth, Minn.

In July, Aspirus Health in Wisconsin signed a letter of intent to acquire St. Luke’s in Duluth, Minn., a system operating two hospitals and dozens of healthcare sites in northeastern Minnesota, northwestern Wisconsin, and Michigan’s upper peninsula.

Aspirus has grown substantially in the last few years. In 2021, Aspirus purchased seven hospitals from Ascension Health.