Northwell Health and Nuvance Health’s 28-hospital merger has cleared its final regulatory hurdle and is expected to close within the next 30 days.
Tuesday, Connecticut's Office of Health Strategy announced it had reached an agreement with the two health systems after just over two months of negotiations over their Certificate of Need application. The pair's merger, announced 14 months ago, had received a similar all-clear from New York's Public Health and Health Planning Council last September as well as sign-offs from each state's attorneys general during the summer.
Alongside price constraints tied in part to state and regional cost growth benchmark, Northwell—the acquirer—will invest at least $1 billion into Nuvance's Connecticut and New York hospitals and refrain from any real estate sale leasebacks over a five-year period.
Additionally, the Connecticut agreement has Nuvance's hospitals implementing Northwell's "more generous" financial assistance policies, maintaining all inpatient services and collective bargaining agreements, developing plans to improve care through physician recruitment and resource allocation, and promoting alternative payment models, according to the office.
The new deal is in line with the terms hashed out last summer by the attorneys general, most notable of which is the preservation of prenatal and postpartum care services in western Connecticut, including at Nuvance’s Sharon Hospital, for at least five years after the deal’s close.
“This agreement reflects the commitment of all parties to act in the interest of healthcare consumers and providers throughout Western Connecticut,” Deidre Gifford, M.D., the office's commissioner, said in the announcement. “Northwell Health will strengthen the capacity of these hospitals to provide accessible, affordable, high-quality care in the diverse urban, suburban and rural communities they serve.”
Connecticut Gov. Ned Lamont, in an included statement, thanked the parties for finding "a fair agreement ... that is ultimately in the best interest of Connecticut residents."
The health systems can now turn toward closing their deal, which a representative of Nuvance told Fierce Healthcare they expect to occur within the next 30 days. It stands to create a roughly $18 billion integrated nonprofit with more than 1,000 care sites in New York and western Connecticut, almost 100,000 staff and 14,500 providers.
Danbury-based Nuvance runs seven hospitals—three in Connecticut and four in New York—has logged multiple consecutive years of losses, most recently by way of a $98 million operating deficit for the fiscal year ended Sept. 30, 2024.
New Hyde Park, New York-based Northwell, formerly North Shore-Long Island Jewish Health System, will be entering Connecticut with the deal. It runs 21 hospitals and logged a $198 million operating gain in 2023—its most recently reported full year, though it was up to a $227 million operating gain across 2024's first nine months.
In a joint statement, the systems celebrated the approval and said their upcoming integrated system will expand access to care, enhanced services and local employment while remaining financially sustainable.
"This partnership opens a new and exciting chapter for Northwell and Nuvance Health and provides an incredible opportunity to enhance both health systems and take patient care and services to an even higher level," Northwell President and CEO Michael Dowling said. "Northwell is committed to ensuring that Nuvance Health continues to deliver high-quality care in local communities for the long-term."
"This opens the door to an even brighter future," added John M. Murphy, M.D., Nuvance's president and CEO. "By joining forces with Northwell Health, we can strengthen and enhance our ability to meet the needs of patients across Connecticut and the Hudson Valley for generations to come.