Healthcare Dealmakers—Elevance to acquire BCBSLA; Regulators' request for Sanford and Fairview and more

Healthcare mergers and acquisitions are in no short supply as providers, health tech companies, retailers and other industry players look to expand their businesses and gain a competitive edge. Here’s a roundup of new deals that were revealed, closed, rumored or called off during the month of January.


Providers

Sanford Health and Fairview Health Services’ plans for a 58-hospital merger could be slowed by the Minnesota attorney general’s office, which formally requested a delay as it conducts a regulatory review. Chief Deputy Attorney General John Keller said the office was still “waiting for substantial information from the parties that will help us analyze the situation” and that it had so far received over 3,500 public comments on the proposal. The health systems said they will be working to deliver the needed information and are still targeting a March 31 close as planned.

Butler Health System and Excela Health finalized their merger Jan. 1, creating a new five-hospital system in western Pennsylvania. The new organization will serve a population of 750,000 western Pennsylvania residents, employ roughly 7,300 people and include more than 1,000 physicians and practitioners. It is expected to generate $1 billion in revenue annually.

LCMC Healths acquisition of three Tulane University hospitals from HCA Healthcare got the all-clear from Louisiana regulators, allowing the organizations to finalize the pending deal. Announced in October, the purchase reportedly ran LCMC $150 million and an accompanying $20 million initial capital investment. It includes Tulane Medical Center, Lakeview Regional Medical Center and Tulane Lakeside Hospital.

University of Chicago Medicine and AdventHealth closed a deal Jan. 1 that sees the former acquire a controlling interest in four Chicago-area hospitals as well as nearly 50 other physicians' offices and other outpatient locations. The facilities were previously part of AdventHealth's Amita Health joint venture with Ascension.

Southeast Health has signed a letter of intent to join Mercy. The Missouri system comprises two hospitals and other clinics. A definitive agreement to join the 42-hospital system is expected for the summer, with integration to follow.

ScionHealth, a long-term acute care and community hospital operator, acquired Cornerstone Healthcare Group. The deal brings 15 specialty hospitals, eight senior living facilities and roughly 3,000 staff.

UCHealth and Parkview Health System signed a definitive agreement to merge sometime in mid-2023. The former is a 12-hospital system with over 150 clinics and 29,000 employees, while the latter includes 350-bed Parkview Medical Center and roughly 3,000 employees. As part of the deal, UCHealth will begin investing $200 million into Parkview and its surrounding community.

UMass Memorial Health and Heywood Healthcare have reportedly called off plans to merge due to “changed circumstances” and financial difficulties. The Massachusetts systems had signed a nonbinding letter of intent in May.

Community Health Systems divested itself of the 122-bed Greenbrier Valley Medical Center in West Virginia and other related assets. The hospital was purchased by a subsidiary of Vandalia Health. The companies have also reportedly signed an agreement to hand Plateau Medical Center to Vandalia that will close before the end of March.

John Muir Health has entered into a definitive agreement to acquire sole ownership of San Ramon Regional Medical Center from Tenet Healthcare. The pair had jointly owned the hospital since 2013 with Tenet holding a 51% share. John Muir Health is buying that 51% interest for about $142.5 million.

Payer

Elevance Health has inked a deal to acquire Blue Cross and Blue Shield of Louisiana, which would join the Anthem Blue Cross affiliated plans. The two already jointly own Healthy Blue, a plan that serves Medicaid and dual-eligible beneficiaries. An acquisition would allow BCBSLA to accelerate its push toward improved access, affordability and quality for its 1.9 million members thanks to the capabilities of Elevance Health's Carelon subsidiary. Terms were not disclosed, though the companies hope to close later this year.

Centene wrapped up its previously announced divestiture of Magellan Specialty Health—which it had picked up early last year as part of the broader Magellan Health acquisition—to Evolent Health. Centene said it received roughly $660 million in proceeds, $400 million of which was cash. The company could receive another $150 million from Evolent based on 2024 performance milestones.

Sentara Healthcare closed its deal to acquire AvMed, a nonprofit health plan in Florida, from SantaFe HealthCare. The purchase brings over 200,000 commercial, individual and Medicare Advantage-covered members into the integrated healthcare system’s fold. Terms of the deal were not disclosed.

Tech

Amazon’s proposed deal to purchase tech-enabled primary care chain One Medical inched closer with an approval from the Oregon Health Authority’s Health Care Market Oversight program. The deal announced in July would bring 188 medical clinics across 29 markets to the online retail giant. Federal regulators are still investigating the deal.

LeanTaaS, an AI software company, announced the acquisition of Hospital IQ, which provides automation solutions for hospitals. The new company is valued north of $1 billion and has a presence across 180-plus U.S. health systems, 4,500 operating rooms, 12,000 infusion chairs and nearly 18,000 inpatient beds.  

CareAcademy, an online caregiver training platform, completed a strategic acquisition of assets from NextStep, a digital training and job placement offering for certified nursing assistants, for an undisclosed sum. The purchased offerings—NextStep’s video-based content and other learning management technology—will be incorporated into CareAcademy’s broader platform and rolled out for customers later this year.

Avel eCare, a clinician-to-clinician telemedicine service provider, acquired after-hours remote pharmacy coverage company NightWatch for an undisclosed sum. The former said its acquisition will help meet growing demand for remote services within its pharmacy services line—for instance, prescription verifications, medication reviews, and clinical monitoring of in-patient and out-patient therapies. NightWatch is active among hospitals, clinics and nursing homes in the Midwest and mid-Atlantic regions.

Miscellaneous

Kaufman Hall acquired fellow advisory firm Gist Healthcare in a deal closed Jan. 1. The six-person company includes media offerings—a weekly industry newsletter and daily podcast—that reach “tens of thousands” of audience members per week. Terms of the deal were not disclosed, though Gist will retain its brand going forward.