Boston Medical Center, Tufts call off merger

Boston Medical Center and Tufts Medical Center have abandoned plans for a merger, according to the Boston Business Journal.

The two providers first expressed interest in merging in December, according to the article, but talks ended this week despite initial reports that they had agreed to discuss terms. "After much consideration, we have determined that at this time it is best for our medical centers to remain separate," Tufts and BMC said in a statement obtained by the publication. "We conclude these discussions with great respect for each organization's mission and remain open to future opportunities for collaboration as neighboring institutions."

Had the merger proceeded, it would have been the largest deal involving Boston teaching hospitals in nearly 20 years, according to the Business Journal.

While neither institution offered concrete reasons for the collapse of the deal, analysts told the Boston Globe the hospitals' leaders could not reconcile cultural and strategic differences, a factor that can make or break hospital mergers and acquisitions. Tufts and BMC had hoped the merger would expand their respective patient networks and allow both to compete with the city's larger, wealthier and more influential hospitals. However, combining the two facilities, located just a mile from one another, would have been a major undertaking likely resulting in layoffs of now-redundant employees.

The two hospitals also each had a different focus, according to the Globe, as BMC serves a largely low-income patient base that its leaders wanted to continue focusing on, while Tufts was more interested in expanding its customer base, 60 percent of whom are covered by government programs, to include more commercial patients.

This is not the first time this year that M&A in Boston lost steam before completion. In February, Judge Janet L. Sanders struck down Partners Healthcare's bid to acquire three Boston hospitals on the grounds that it could not guarantee the deal would not increase the cost of healthcare, FierceHealthFinance previously reported.

To learn more:
- here's the Business Journal article
- read the Globe article