Atrium, UNC Health put merger plan on ice

Dive Brief:

  • Atrium Health, formerly known as Carolinas HealthCare System, announced Friday that its planned merger with UNC Health has been suspended because of disagreements between the two systems on which would control the combined company, The Charlotte Observer first reported. The now-stalled deal would have created a system with more than 50 hospitals and 100,000 employees.
  • The lapse in negotiations comes less than a month after Atrium signed a letter of intent to partner with Navicent Health.
  • Although consolidation among hospital systems has ramped up over the past year, the failure of the two groups to come to terms shows it’s not always a smooth path.

Dive Insight:

The merger plan was announced in September, but the deal now appears to be going nowhere.

“In our letter sent to UNC Health Care today, we informed them that while we have not been able to reach an agreement, our respect for UNC Health Care, its team and UNC Health Care’s accomplishments has grown through this process,” said an Atrium Health statement also obtained by Healthcare Dive.

Merger mania is still clearly evident in the industry, however.

Advocate Health Care and Aurora Health Care recently moved closer to merging to form the 10th largest nonprofit healthcare system in the U.S. after receiving regulatory approval from both the Federal Trade Commission and Illinois.

Meanwhile, Ascension and Presence Health recently signed a definitive agreement to combine, and Ascension is reportedly in talks to also buy Providence St. Joseph Health. Catholic Health Initiatives and Dignity Health are also working to merge into a new health system, which would have 139 hospitals operating in 28 states.

The mergers are evidence that health systems continue to search for ways to capture economies of scale and cut costs as hospitals face lower reimbursements and patient volumes. But despite the trend, combining massive health systems can be difficult with regulatory and other challenges.


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