US: Intended hospital operators in mega-merger talks

Ascension Health and Providence St. Joseph Health are in talks about a merger between the two Catholic non-profits that would create the largest US hospital chain, the Wall Street Journal reported on Sunday, December 10, citing people familiar with the discussions.

A deal between St. Louis-based Ascension and Renton, Washington-based Providence would give the combined entity 191 hospitals in 27 states and annual revenue of US$44.8 billion, the Journal reported. That would surpass the current largest US hospital operator.

The wave of consolidations in hospitals affects the healthcare ecosystem by altering the negotiating dynamics with other players, such as insurance companies. Of recent note in that sector is the announcement on December 3 by CVS of its intent to acquire Aetna.

The two have been in talks about a deal for months but have not reached an agreement, the Journal reported. The paper said that unlike for-profit companies, mergers of nonprofit hospital operators do not typically involve one entity buying the other.

Full Content: Wall Street Journal

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