Danbury, Connecticut-based Nuvance Health is joining Northwell Health, New York’s largest provider and private employer, under a strategic merger agreement unveiled Wednesday.
The deal, which still requires regulatory signoffs, would create a healthcare network of more than 28 hospitals, over 1,000 care sites, nearly 100,000 staff and 14,500 employed providers, the two nonprofits said in their joint announcement.
“This partnership opens a new and exciting chapter for Northwell and Nuvance and provides an incredible opportunity to enhance both health systems and take patient care and services to an even higher level,” Michael Dowling, president and CEO of Northwell Health, said in the announcement. “We have similar missions in providing high-quality care for patients in the communities we serve. We look forward to building on the care that Nuvance Health’s 14,000 staff members and providers deliver each and every day.”
Nuvance Health currently spans seven hospitals—four in Connecticut and three in New York. It logged $2.65 billion in revenue, a $164.2 million operating loss and a $121.5 million net loss for the fiscal year ended Sept. 30, 2023. Last summer, Moody’s downgraded its credit rating amid concerns of the system’s “weakened operating performance and reduced liquidity.”
The health system is the result of a 2019 merger deal between Western Connecticut Health Network and New York-based Health Quest.
New Hyde Park, New York-based Northwell, formerly North Shore-Long Island Jewish Health System, employs 85,000 people across 21 hospitals and about 900 outpatient facilities. It treats 2 million patients per year and brought in $15.6 billion of operating revenue during its 2022 fiscal year. Across its most recently reported nine months of operations, the system logged a $135 million operating income and 1.1% operating margin.
The deal would extend Northwell into Connecticut, creating a wider integrated care network that spans the full range of ambulatory, hospital and post-acute services, the partners said. They would be able to combine their purchasing power, clinical capabilities and expertise and infrastructure to “accelerate innovation in patient care and advance medical research that can help transform lives,” they said.
The arrangement comes with promises that Northwell “will make significant investments” in the smaller system, according to the announcement.
The systems said that combining their organizations would also improve their ability to attract and retain clinical, research and business talent. The announcement highlighted “greater professional growth opportunities, new career prospects and … academic pathways for health professionals.” It did not address whether a merger would lead to workforce reductions in any areas.
“By joining forces with Northwell Health, we are taking a giant leap forward in our shared mission to enhance the quality, accessibility and equity of the healthcare we provide to our communities,” John M. Murphy, M.D., president and CEO of Nuvance Health, said in the joint announcement. “This agreement enables us to make significant improvements to health outcomes for community hospitals and to deliver unparalleled care and drive positive change in the healthcare landscape.”
Hospital and health system dealmaking has been trending upward. A recent merger and acquisition report from Kaufman Hall (which served as a financial adviser for Nuvance Health in the new merger deal) noted that much of the past year’s transactions were fueled by one party’s financial distress and predicted that the trend would continue into 2024.